The best insurance agents and financial advisors always act in good faith and look out for the best interests of the client.
Being an insurance agent means you may face ethical decisions every day. Part of being an ethical and compliant agent lies in making sound decisions that prevent the onset of potentially compromising situations.
But what happens when it is the client that – wittingly or unwittingly – puts the agent into a compromising situation?
Agents constantly have to juggle obligations to clients, their agency and carriers. Who do you serve first? While the default thought might be to always do what’s best for the client, these situations often are not so cut-and-dried, says Brent M. Kelly, an agent with Clemons Insurance in Bloomington, Ill.
“Sometimes prospects or clients will have expectations that are not realistic,” Kelly says. “Or maybe they have done something to put themselves in a difficult situation and they call upon you, the agent, to go beyond what you really ethically should be doing or are even capable of to fix their problem. And that’s where I think sometimes you can get in trouble.”
He notes that agents inherently do want to put the client first. They pay the bills, after all. But he’s seen situations where an agent will go out of the realm of what they should be doing in an effort to help the client.
“They will go above and beyond and do something for their client that really is not only unethical but is just a financially bad decision, and it will cause an issue with the insurance carrier. So you can try to fix this one situation with a client because you want to do whatever you can, but you end up causing a serious strain with an insurance relationship with a company partner that can affect all of your clients.
“So you really need to think about that – part of it is thinking big picture – making this decision to try to fix this which I know really isn’t the right thing to do, but I could probably get away with it. Is it worth risking the rest of your book? That’s a question you’ve got to answer,” Kelly says.
“If you go, ‘Well, I’m not quite sure if it’s the right thing to do, but this is my client who’s in a pinch, I feel bad for the guy. I’m going to go ahead and make an exception because he deserves it.’ And then next thing you know, it backfires, and you got people pointing fingers – ‘You did what?’ That’s a situation where you look at the short term when you really need to look hard at the long term.” Kelly says.
It comes down, as usual, to doing the right thing in the grand scheme of things, says Jason Kestler, president and CEO of Kestler Financial Group, Inc., in Leesburg, Va.