Ethics: Not just a box-ticking exercise
Ethics has never been far from my mind recently, and I doubt many other people have been able to avoid thinking about either, particularly as we need to “tick” the ethics box as part of any “gap-fill”.
But there have been a couple events recently that have me believing that, for some people, ethics is simply a box ticking exercise rather than a core principle of how they should conduct themselves. Lumped in with ethics I should add honesty and integrity.
My interest was piqued earlier this week when reading an online article from one of the broadsheet newspapers. It was about the retail distribution review and asked its readers: “Would you pay £500 for financial advice?” to which my immediate thought was, “That’s probably understating it a bit”. But as I read through the fifty or so comments that had appeared below the article I came across a name I recognised. It was an old boss I had worked for more than twenty years ago. Only it was not.
The reply said he was now retired (he is not, I called him) before describing how RDR would kill the golden goose which was commission. It went on to say he was now living in clover from his large pension pot, in a house tucked away down a private four mile lane. He allegedly got rich by taking maximum commission, churning business and taking the lion’s share of commission from his team of advisers who he promptly booted out if they complained.
Clearly a disgruntled former employee, and while it might come across as funny (well slightly amusing) it is not what you would call ethical behaviour.
Around the same time I had reason to believe someone close to our company was embarking on a plot to solicit our clients and entice away our professional connections. This kind of action is not new, and has been going on since financial services made the leap from industrial branch business into ordinary branch business - in other words, a long time. Client ownership was not as defined as it might be today and often possession of the client’s data was enough to win the day.
These days however, there are codes of ethics to consider. The professional bodies are building on their previous “codes of conduct” to create something that might have more effect on ethical behaviour than any amount of regulation. The idea that your behaviour can be reported and investigated by your professional body - and which could lead to the withdrawal of your annual Statement of Professional Standing - might over time deter many instances of unethical behaviour arising between practitioners, something the regulator is not really interested in.
Dennis Hall is managing director of Yellowtail Financial Planning