As a business ethics instructor for Kaplan Professional Schools, I get to teach about ethics on a regular basis. Everyone in the state of Minnesota who wants to maintain an insurance license must attend an ethics course as part of their continuing education requirements.
Over the year I have taught my ethics course to thousands of financial professionals, and one common theme that keeps them coming back class after class is “How do you stay ethical in an unethical world?” I start off the course by asking everyone if they are ethical, and as you might expect, everyone says that they are. However, by the end of the class it becomes very apparent that many of these insurance and investment professionals are just as ethically challenged as everyone else is in life.
You might think that if something is legal that it should also be ethical but, upon further review, that isn’t always the case. Take a moment and think about all of the things in America that are legal, yet might not be ethical. I usually get answers like abortion, gambling, smoking and the death penalty, just to name a few. I’m sure that you could come up with many answers on your own that could make one question how ethical America is as a country.
There are many definitions of ethics but, to make it simple, think of it as what is right, good and proper. As you might imagine, doing what is right, good and proper is going to be a challenge because we all might have different opinions on what is right, good and proper.
In the financial world many of these ethical issues often come down to a conflict of interest. Conflict of interest is probably the most difficult to identify, regulate, and police. What ends up happening is that the individual financial planner or insurance agent is left to struggle with conflicts of interest within their own ethical belief system.
Now, I don’t think financial professionals are any more or less ethically challenged than any other profession, but I do know that they can struggle with the ethical challenges of doing what is in the client’s best interest first and foremost, and not what’s in their best interest, just like everyone else in life.
So, the next time you meet with your current advisor, ask them how they deal with personal and professional ethical challenges. If they say that they don’t have any ethical challenges, just laugh and say never mind, I think you just answered my question.
Remember that some people that take advantage of others aren’t in jail; they are just living a conflicted lifestyle and a compromised life; which in my humble opinion is no way to make your walk through life.