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Avoiding ethical lapses and other ‘gateway drugs’

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It seems as if nothing is sacred anymore. Associated Press reports “the main Franciscan religious order in the Roman Catholic Church is in a financial crisis because of alleged wrongdoing from within and outside its ranks.”

Apparently, the 800-year-old order had invested tens of millions of euros in suspect firms currently under investigation in Switzerland for “dodgy practices.”

Sure, the overwhelming majority of advisors and agents wouldn’t risk hellfire damnation to stoop so low as to rip off priests and the charges they serve—at least not initially.

But Illinois-based agent Brent Kelly poses a simple question about ethics that elicits interesting reactions. While ethical issues involving centuries-old religious and charitable organizations are easy to avoid, and while many individuals consider themselves ethical, are you always ethical?  

Did you pause?  

“As much as you may think you are, I guarantee you are not,” Kelly said. “I don’t mean you are unethical in terms of a serious offense like fraud or embezzlement, but in small actions that could lead to greater consequences.” [1]

We’d agree, and wonder if, like supposed “gateway drugs,” small ethical transgressions eventually lead to larger moral failures. It’s a question that’s been around since ancient philosophers in white robes and sandals first pondered the thought. It’s the reason Kelly believes that ethics can be taught, if for no other reason than to illustrate seemingly inconsequential actions that could quickly grow to devastate firms who believe they have the most ethical of business philosophies and practices in place. This is especially true in today’s hyper-regulated, fast-paced and increasingly complicated advisor and agent business environment.

However, tacking on a few credits of ethics instruction to continuing education programs won’t get it done. There shouldn’t  be separate ethics courses. It’s too easy to inadvertently reinforce ethics as something in which to aspire in the classroom, but forgotten once the advisor or agent returns to the daily routine of mountains of files and never-ending meetings and phone calls.

By integrating ethical instruction into every facet of continuing education, it helps avoid what social psychologists Max Bazerman and Ann Tenbrusel call our “moral blind spots,” which are biases that distract us from ethical consequences.

Moral blind spots can be illustrated with a simple experiment. Two tasks must be split between yourself and another person. One task is fun and pays a nominal amount of money; the other is tedious and pays nothing. Most experiment subjects decided to flip a coin to arrive at the division of labor. However, when the flip was performed in private, about 90 percent of subjects came back claiming that their coin landed in their favor and assigned them the fun task, rather than the 50 percent that one would expect from a coin toss. Additionally, when performed in plain view of the other person, many subjects claimed it was a practice flip if the outcome was not in their favor. In other words, they sought to temporarily adjust their sense of fairness to obtain a favorable outcome.[2]

Might similar blind spots occur in business situations involving advisors and agents?

We hope the question is rhetorical. It’s especially important because advisors and agents are, by the nature of their profession, client-focused. Yet as Kelly points out, it’s the client themselves that most often put their agents and advisors in difficult ethical positions. They’ll ask the advisor to sign off on an application because they might not feel like making the drive to the office for something so menial. Or they might ask the advisor to “bend the truth” a little. Not wishing to risk the client relationship, the advisor therefore agrees.

Ethics aren’t simply a business philosophy, operational code or moral high-horse on which to preen. Their integration into every fiber of the advisor and agent’s education and business also results in unmatched customer service, more business and a better overall quality of life for all involved.

For quick and enlightening exercise to determine just how ethical you are, as opposed to how ethical you think you are, answer a few of the questions in this article from Harvard Business Review.

[1] “Can you teach ethics to insurance agents?” Aug. 20, 2014.

[2] “Can You Train Business School Students To Be Ethical?” Sept. 4, 2012.