Badmouthing the competition is a losing proposition

Besides being the right thing to do, ethical marketing can have significant benefits for your business. For example, if you display integrity and new clients believe you will live up to your word, loyalty will develop, customer retention will rise, and those new clients will be more likely to provide referrals.

Agents that don’t commit to ethical marketing risk ruining their own reputation instead. There have been plenty of examples in the news recently of agents or agencies engaging in unethical marketing practices becoming targets of market conduct investigations by state insurance boards, which can lead to fines, restitution, license suspensions or revocations.

Defaming another company, product or agent in order to make yourself, a company or agency look better is actually less of a problem now than it used to be, according to veteran insurance consultant and industry ethics advocate William K. “Bud” Bridgers of Pleasant Grove, Utah.

“This type of behavior is almost always confined to the young, new agent or advisor and the branch or regional sales managers. It is less of problem than it used to be because financial firms are experiencing an increase in people moving to another company or carrier on a regular basis,” Bridgers said. “Larger firms are buying advisors’ books of business as an incentive to make the move. At least two to three times a year I read of a large ‘team’ of advisors that have moved their business from one large firm to another.

So, the company you defame today could be a firm that in the future may pass you by—or not offer to buy your book—in favor of another team that had a higher sense of professional propriety, he said.