An advisor’s code of ethics
By Daniel Williams
When many people think of MDRT, they think of production. For instance, the baseline for membership is $90,000 of eligible commissions, $180,000 of eligible premium or $154,000 in income. Those are lofty numbers, and according to the 2012 membership statistics, the organization counts 34,579 qualifying members.
While the numbers are a qualifier, so is the organization’s code of ethics:
- Always place the best interests of clients above my own direct or indirect interests.
- Maintain the highest standards of professional competence and give the best possible advice to clients by seeking to maintain and improve professional knowledge, skills and competence.
- Hold in strictest confidence, and consider as privileged, all business and personal information pertaining to clients' affairs.
- Make full and adequate disclosure of all facts necessary to enable clients to make informed decisions.
- Maintain personal conduct that will reflect favorably on the financial services profession and MDRT.
- Determine that any replacement of an insurance or financial product must be beneficial for the client.
- Abide by and conform to all provisions of the laws and regulations in the jurisdictions in which we do business.
“Do not leave out facts when talking with a client,” he says. Too often, advisors cutting corners will send page 10 of a product document, but conveniently leave out pages that include the downside of a product. As Appel says, the clients need to see the negative aspects as well.
GuyBakerGuy Baker of Irvine, Calif., is a 41-year member of MDRT, including serving as the organization's president in 2010. Baker makes an interesting distinction on the matter of transparency. “If I come to a client with an agenda, I’m really hiding from them the sole purpose of my interaction," he says. "If I’m transparent, I come to the meeting with no agenda, and I’m there to listen to their ideas and their situation. To be transparent, I have to maintain ‘no agenda’ for the meeting, even if it means I don’t benefit from it.”