The ethical development of financial professionals progresses through distinct stages, as described in Kohlberg's theory of moral development. This model explains the transition from self-interest to principled ethical decision-making, unfolding through the pre-conventional, conventional, and post-conventional stages.

In the pre-conventional stage, decision-making is driven by personal benefit. Actions focus on self-interest and rewards, with little regard for ethical responsibilities or the welfare of others. Professionals at this stage prioritize personal gains over broader obligations, reflecting limited moral reasoning.

The conventional stage represents a shift towards adherence to social norms and professional standards. Individuals recognize the importance of trust, integrity, and reputation. Ethical behavior aligns with societal and organizational expectations, demonstrating a commitment to fairness and accountability. Decision-making at this stage reflects an understanding of the value of ethical practices in fostering professional relationships.

The post-conventional stage is guided by universal principles such as fairness, transparency, and client welfare. Ethics transcend regulatory compliance, focusing on moral reasoning and the intrinsic importance of integrity. This progression underscores the significance of moral development in fostering ethical decision-making and professional trust.