Rarely does the public use “ethics” and “politicians” positively in a sentence. When a well-known, but now retired, politician makes the news for a salacious bribery/payoff scandal, no one is surprised. Once a politician, always a politician.
But it is not just politicians. Police officers, teachers, clergy and yes, even journalists, are part of a long list of professions that have experienced black eyes recently.
The financial services profession has its own history and is still smarting from a series of recognizable, one-name scandals: Milken. Madoff. Stanford. Lehman. Even Enron. The average advisor’s business is far removed from these incidents and yet longtime clients’ had flashes of concern. Though the dust is somewhat settled, when (not if) will the next one hit?
The reality is a person, or event, or more likely, a series of events, can dramatically affect how the public regards – positively or negatively –a profession overall.
Gallup polls show interesting trends by regularly surveying the public on their view of individuals in different professions. The most telling category is how many of those polled see those in a particular profession as having Very High/High ethical standards and honesty.
For comparison’s sake, members of Congress do not score well in Gallup’s rankings. They are wallowing in the 7-8% range for this category. Their top rating by far since 1976 was 25%, which they achieved just after September 11th, a telling sign as America was at its most united.
Nurses are at the top of the charts with a whopping 80%, a flattering and deserving recognition.
Stockbrokers, who managed mid- to high-teens ratings from 1994 until about 2006, dropped to as low as 9% on the heels of the 2008 crash, where blame needed to be assigned. Bankers most recently rated a 23%, which is down significantly from numbers 10-15 points above this in 2005. “Insurance salespeople” rate in the 10-15% range regularly (one wonders how that view would differ if salespeople was changed to managers or brokers or advisors?).
What does this mean for financial services overall? Many feel that perceptions of stockbrokers, banking and insurance salesmanship color the advisory profession, albeit unfairly.
If clients have questions, do not shy away from addressing the topic. These rankings often reflect the behavior of a few, not the passion and commitment of many. Clients will likely understand that no one wants to be judged on the actions of others in their line of work. Remind them to think of any job where one headline hasn’t caused concern at some point.
Explain the standards you employ to ensure their interests are at the forefront of your advice. Also know that incidents and scandals create perception spikes that are rarely permanent. Time can smooth out rough edges and communication can help bring understanding.