If you’re an RIA or IAR, you are required by the SEC (federal and most states) to have a code of ethics. If you are using the sample language provided by the SEC, then you don’t have a code of ethics — you have a code of conduct.
A code of ethics is principles-based; a code of conduct is rules-based. Want to know an easy way to remember the difference? Congress has a code of conduct, not a code of ethics. A code of conduct, which is rules-based, is easier to work around than a code of ethics.
So, what are the seven signs that you don’t have a code of ethics?