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The truth: Your new standard of care in financial services, Pt. 1Article added by Steven McCarty on January 10, 2013
Steven McCarty

Steven McCarty

San Diego, CA

Joined: March 22, 2006

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Your clients — the people you rely on for your livelihood — have zero tolerance for industry falsehoods. When lied to repeatedly, they began to mistrust advisors and companies, question their recommendations, refuse to buy their products and tear down their reputations.

Politics is about the selling of candidates and public policies. Unfortunately, in the run-up to the November 2012 presidential campaign, money wasn’t the only currency used to get candidates elected. The other was lies. In fact, both parties produced so many distortions and half-truths in this campaign that Americans needed independent fact-checkers (FactCheck.org and PolitiFact.com, for example) to vet candidate claims.

Lying in the public square is a symptom of a larger pattern of deceit in every corner of American life. Consider these facts:
  • Forty percent of Americans think it’s OK to lie (Ipsos survey, 2006).

  • People lie about 11 times a week, according to Anita Kelly, Ph.D., a psychology professor at the University of Notre Dame.

  • America’s young people are often dishonest, according to the Josephson Institute. Its Integrity Survey found that 38 percent of young people ages 18-24, and 51 percent of those age 17 and under, believe they must lie and cheat in order to succeed.

  • Labaton Sucharow (a New York law firm) says that 24 percent of financial professionals believe that unethical or illegal conduct is par for the course.
Voters aren’t the only people who lose faith when lied to. Your clients — the people you rely on for your livelihood — have zero tolerance for industry falsehoods. When lied to repeatedly, they began to mistrust advisors and companies, question their recommendations, refuse to buy their products and tear down their reputations. In short, lying to seniors is not only unscrupulous and morally repugnant, it’s a death trap for your reputation and practice.
So, what to do about it? Adopt a new level of care: The truth standard. Layered on top of the existing suitability and fiduciary standards, it would require 100 percent adherence to fact-based communications, including:
  • no longer allowing misrepresentations or omissions about a competing advisor, carrier or product

  • banishing fear mongering about the viability of Social Security or the guarantees of the Federal Deposit Insurance Corporation, among other issues

  • requiring advisors to come totally clean about their professional expertise and training
Sound refreshing? You bet. So be sure to read the next installments of this article series for further details. For now, follow these guidelines for injecting more truth into your client dealings:
  • Never tear down a competing advisor, product or carrier unless you can provide facts.

  • Don’t prey on senior fears about Social Security, FDIC insurance or Medicare/Medicaid. Instead, use facts to promote senior understanding.

  • Be fully transparent about your license, business model and compensation.
In short, never say anything that would set off Politifact’s Truth-O-Meter. Flashing red? You’re outta here.
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