Question

3b) Despite Sharesies’ efforts to promote consumer’s interests, financially vulnerable consumers could potentially suffer harm from using the service. For instance, some consumers with low income and high debts may think that investing in shares through Sharesies can generate quick money. One philosophy in the textbook holds that ethical issues like these are decided by the free market and legal system. Companies have only legal responsibilities, not social responsibilities. Explain what TWO (2) alternative philosophies Sharsies could apply to this situation and what the risks are for Sharesies if they do not adopt either of these alternative philosophies?

Answer 1

Sharesies efforts were to promote the consumer interest and financial vulnerabilities by encouraging the investing habits in the people. The tool for investing in diversified funds without making big investment. The investors can but shares without picking up the stocks. Sharesies is a simple and convenient online method to give small amount of money for easy access of share funds.

But financially vulnerable consumers could potentially suffer harm from using the service. According to the services, sharesies are not good for beginners. The company not only has legal responsibilities but also social responsibility related to the employees and other companies. The main aspect of such philosophy is that the customer thinks that the investments in sharesies will leads to increase in the profit and generate money. This investment is also known as ethical, impact and responsible investing service which will affect the social responsibilities and also financial return of the company. This avoids the companies that cause harm to the individual, societies etc.

The main philosophies provided by such service are:

1. First is the screening the revenue sources by the company which avoids the company to engage in other activities like gambling, tobacco, etc.

2. Also, this avoids the controversy and excludes the poor performers which could cause harm to the society and other companies. The rating companies by the investors find a suitable method to enter into investment activities.

If above philosophies are not followed then this could negatively affects the companies. There are certain risk in relation with the working of sharesies in the companies like generating less profits or reducing the confidence the of the beginners investors.