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A Gentle Reminder

Ethics training is important, even if you’re sure you always do the right thing.

By Richard J. Gladney

We all understand the word ethics. It’s right or wrong, black or white, right? But ours is an industry constantly open to temptation. It takes a strong character not to fall into the very human trap of greed and selfishness. Your kids are starting college in the fall; your parents need skilled nursing care, and you have the perfect clients for a new product that delivers a nice commission and bonus to your bottom line that will help you manage these expenses.

You know not to sell products to clients that may hurt them in the long run just so you can meet your personal financial obligations. But some may believe that it’s OK to sell a product that they think might be suitable, when it’s clearly not, or whose misguided recommendations are opening the door to bad judgment. There can be confusion among individuals who are basically good people—and that’s why I believe ethics training is necessary.

The accountability factor
No one is standing over your shoulder at work listening to your client conversations. You actually have to work hard to always do the right thing. But the final judge is you. You are accountable to your clients, your manager, your firm and most importantly—to yourself.

It’s not that we need ethics training; it’s that we have to be reminded of how to do the right thing. Ethics training helps teach that accountability.

But it’s not just you
Sometimes, advisors see a rising star who is well respected and lives by The Golden Rule in his personal life, but applies a different standard to his business practices—the “all is fair” philosophy. Observers think, “Oh, so this is the fast track to the top.” We need to be reminded that the fastest way to the top is not necessarily the best way, and ethics is important, in both our business lives and our personal lives.

We know that ethics and leadership values come from the top. Make sure you are involved in the kind of environment where managers care that producers are selling appropriate products, and are not just worried about the bottom line.

Don’t think clients don’t notice
The No. 1 reason clients want to do business with you is that they can trust you. Your reputation is based on your values, beliefs, ethics and character. Not only your peers but your clients recognize these traits in you. Remember, they are constantly judging and evaluating you.

If your firm does not have an ethics program currently in place, why not suggest developing one? For example, you could help your manager create a hands-on workshop and invite advisors who are at the top of their game morally and ethically and can share their experiences. Successful local business owners would be great role models to speak at a class, too. A session could include participants who share stories, and create what-if scenarios and question-and-answer segments.

We all have learned that it’s not the smartest advisor who has the best practice; it’s the sincere, hard-working advisor who puts the clients’ interests first. This, and more, is what ethics is all about. Ethics training allows us to reflect on our current business and how we treat our clients. It also allows us to teach and remind those colleagues who may have turned a blind eye to The Golden Rule. Training shouldn’t insult or intimidate us. It simply reinforces the positive aspects of our business and keeps us vigilant. Let’s embrace it. As James Owen wrote in a favorite book of mine, Cowboy Ethics: What Wall Street Can Learn From the Code of the West, “I have come to realize that anybody can make money; it is much harder to make a difference.”

Richard J. Gladney is senior vice president of investments, an investment officer and managing partner for Gladney Consulting Grooup of Wachovia Securities LLC (member NYSE/SIPC) in Providence, R.I. Contact him at

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