A British trade association for financial industry professionals says that a fund should be established to provide financial support to industry whistleblowers, and that firms should adopt practices to encourage early reporting of possible issues.

The Chartered Institute for Securities & Investment (CISI), which is a professional association for the securities and investment industry in the UK and other global financial centres, has launched a new campaign Tuesday that calls on the financial industry to adopt policies that facilitate speaking up, to help staff report violations of company policy, the law, and other failings. And, it says that a financial hardship fund be set up to provide support to potential whistleblowers.

“Although both the Financial Conduct Authority and the Department of Business Innovation and Skills have said that they are not in favour of providing financial incentives to whistleblowers, the CISI believes that the very real financial repercussions all too often suffered by whistleblowers means that they should be provided with financial support,” said Simon Culhane, CEO of the CISI.

The CISI reports that a 2013 survey of whistleblowers in the UK found that 60% did not get any response from management, and when a response was received, it was generally not supportive. Of the other 40%, the most common response was formal action against the employee such as demotion, suspension or discipline; the second most common response was dismissal. And, in financial services in particular, 81% of whistleblowers reported that their position had worsened after their first attempt at raising a concern, it says.

“Accordingly, we suggest that a financial hardship fund should be established, financed from fines imposed by the regulator, to provide comfort to potential whistleblowers that they will receive financial support where necessary,” said Culhane.

Yesterday, the U.S. Securities and Exchange Commission (SEC) announced a record whistleblower award of between US$30 million and US$35 million, under a program that it established in the wake of the financial crisis. In Canada, the Ontario Securities Commission (OSC) has said that it plans to publish a concept paper later this fall on possibly establishing a similar program in Ontario.

At the same time, the CISI says that its program to encourage reporting aims to create a climate for addressing possible issues internally before whistleblowing is required. “Our Speak Up programme attempts to address the issue of compensation by giving individuals the tools and the confidence to speak up early, without financial incentives, and by encouraging open cultures within firms where employees are encouraged and protected when speaking up, so compensation is not necessary, but financial protection is,” said Culhane.

“Speaking up carries fewer negative implications than whistleblowing and suggests a more open culture which is, in turn, the aim of having a speaking up policy or programme,’ he added. “Speak Up is about creating a culture where an individual feels comfortable raising issues of concern within a firm at the earliest point of uncertainty about a violation, rather than whistleblow, which we consider occurs when there is no other alternative and an individual may be in a desperate situation. We would encourage all firms in the industry to establish a Speak Up policy.”