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Financial Planning > Behavioral Finance

Ethical sales practices are good for more than your conscience

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In financial services, most ethical or legal problems are self-inflicted.

Large, sophisticated Ponzi schemers are outliers. Much more common are advisors who a) make unforced errors through inattention or sloppiness, or b) aren’t well grounded in principle.

In the second category are those who have no fixed beliefs. Are there things they’d never do to get or keep a client? Is making money their prime directive? Do they serve their clients or themselves?

Why does this matter? Because advisors who know what they stand for achieve three advantages:

  1. Their marketing efforts are stronger. An ethics-based value proposition cuts through the market clutter and powerfully connects with prospects, leading to more suspects becoming prospects.
  2. Their sales efforts are more efficient. Time to close is shorter because their enhanced credibility breaks down mistrust before it becomes a brick wall.
  3. Their communications and customer-service activities are more effective. This creates stronger and more profitable client relationships.

The problem is, most financial advisors never put their values on paper. This is a mistake because it makes them vulnerable to ax-grinding third parties or to self-blinding expediency. Either way, without ethical values clearly defined, they and their staff (if any) are prone to make poor choices that can erode trust, goodwill and future sales.

So how do you identify your core ethical values and communicate them to others? Here’s a brief suggested process.

First, write down the names of five to 10 successful financial advisors in your region and/or industry niche. Why do you admire them? What values do they appear to stand for? Which of those values resonate most strongly with you?

Second, define the values and expectations of your key stakeholders. These may include:

  • Family
  • Clients
  • Business partners
  • Your FMO’s top executives
  • Marketing leaders at your insurance/investment product manufacturers
  • Your staff (if any)
  • Opinion leaders in your industry niche
  • Regulators
  • The general public

Third, ponder the values you hold most dear. What are your own cherished dreams and what values will help you achieve them? Consider including business-oriented values such as:

  • Customer Service
  • Quality
  • Innovation
  • Safety/reliability
  • Efficiency
  • Transparency

Also think about personal values such as:

  • Integrity
  • Honesty
  • Openness
  • Respect
  • Fairness
  • Responsibility

Fourth, based on the prior steps, create a list of your top ten ethical values. Then show it to several colleagues you trust. Ask them to select those that resonate most strongly with them. Using their feedback, winnow the list down to your top five. Then type them on a sheet of paper entitled something like: “This I Believe: The Core Values of My Company.”

Now here comes the most important step: Integrate this content into your marketing program. Include it in all your marketing collateral and on your website. Build it into your online social-media profiles and your seminar presentations. Turn it into a poster or plaque for your office. The sky’s really the limit in terms of “branding” your sales effort with ethical values that appeal strongly to today’s prospects.

Finally, consider joining groups that amplify your values, including the Society of Financial Services Professionals and the National Ethics Association and display their logos proudly on your website and collateral.

This is not a complex or tedious process. But it is soul-searching. So take your time, and do it right. Because to sprint to success in sales or in any other aspect of your professional life, you must first know what you stand for … ethically!

See also:

Why best practices put ethics first

Advisor ethics: Building your best practice

When business and personal ethics collide: A cautionary tale

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