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A Study in Contrasts

Ethical duty to your clients extends beyond meeting the minimum CE requirements.

By Frank C. Bearden, MSM, CLU, ChFC

You can define ethics as the rules of behavior that arise from our beliefs and values. And there are three ethical reasons why financial advisors should keep current in their professional development:

1. Professional value: Many of us acquire professional designations and advanced degrees and attend continuing education (CE) classes because we believe we are people of value. We want to be as professional as we can. Acquiring knowledge, skills and certifications makes us feel good about ourselves.

2. Obligation to our profession: When an advisor begins to feel he is a part of the profession and identifies with financial and insurance advisors as a group, he often also feels an obligation to uphold the profession’s image to the public. We simply realize that the quality of service we provide to clients reflects not only upon us but on other advisors, too. We develop the belief that the financial advising profession should be held in high esteem.

3. Obligation to clients: We extend much effort in encouraging new and existing clients to rely on us for financial advice. When that reliance develops, when a client comes to depend on us for advice, we realize that an obligation to this client follows. This involves providing accurate, appropriate financial advice. Let's look at two contrasting examples.

We realize that our quality of service reflects not only on us, but on other advisors, too.

A study in contrasts
John Advisor has spent considerable time, effort and money to impress clients with his professional image. He has earned his CLU and ChFC designations. He has decorated his offices in an upscale décor, and is certain that the outward appearance of being a professional is the key to gaining clients and having a successful practice. John has a very polished image.

John’s professional development is another matter. He certainly completes all the required CE courses for his designations and licenses; however, he spends little time in better understanding the complexities of his practice. He thinks his obligation to a client ends with motivating that client to make a financial decision.

John has little concern for the quality of his work. He does not feel the invigorating, sometimes humbling, obligation of being an authority for his clients. For these reasons, John does only the minimal work required in professional development that relates to his actual practice.

Mary Advisor (no relation) is a strong contrast to John. Outwardly, the two advisors are similar. Both hold the same designations and licenses. John is more outwardly polished than Mary, often making a more favorable first impression. Beneath the surface, however, there are big differences between the two.

While Mary cares about her professional image, her primary concern is her sense of duty to her clients. Her practice grows from her awareness that her clients rely on her. Because of this, Mary strongly believes it's her professional obligation to provide her clients with current, accurate and appropriate advice.

Mary's belief in her duty to her clients has driven her to subscribe to several financial publications and to join NAIFA. When she needs CE credits, she selects courses that directly relate to her practice. At least once a year, she attends a seminar by a recognized expert in her area of practice. And in an effort to give something back to her profession, she occasionally writes articles for one of the financial trade journals.

Consider the motivations for the professional development of these two advisors. John certainly engages in professional development, at least outwardly. His behavior, which is technically ethical, is motivated by the belief of self-respect. John’s beliefs regarding his practice do not extend far beyond his belief in his own value. He has little concern for obligation to his profession or, more importantly, to his clients. For this reason, John looks good on the outside but has little sense of duty to his peers or clients.

Mary has some of the same motivations as John, but her beliefs about her practice extend beyond those. She feels a strong obligation to her profession and to her clients, which causes her professional development to be quite different from John’s. John does what is required to maintain his designations and licenses, and little more. Mary’s professional development is focused on her practice and her desire to expand the service she provides. Her professional development activities easily exceed those required by designations and licenses.

As each of us grows in our profession, we should hold each of these three beliefs: our own professional value, the value of our profession and our professional obligation to clients. These beliefs readily enforce the importance of ongoing professional development as a tool for providing quality advisory service to our clients.

Frank C. Bearden, MSM, CLU, ChFC, is a field manager, financial advisor and agent in San Antonio, Texas. You may reach him at


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