Our commitment to ethical practices must adapt to the new environment we’re in

The ways MDRT members conduct business have changed substantially around the world during the last two years. In our quest to provide client service during office building closures, social distancing and individual personal concerns for safety, many of us have changed the way we interact with clients — even with our staff members. Much of what we do is now done virtually, and our client expectations have also adjusted to the world around them.

As the changes around us slow a bit, now is the time to take a closer look at the way we operate to ensure we’re still acting responsibly and ethically on behalf of our clients. Our committee weighed in on what it takes to lead an ethical practice in today’s world.

How do virtual client meetings impact ethics?

As stay-at-home mandates circled the globe in early 2020, Zoom and other virtual meeting platforms became a lifeline for us to reach out to clients and continue conducting business. Two years later, this technology has permeated many areas of our day-to-day work. For some advisors and clients, virtual meetings continue to be a necessary safety precaution — at least periodically, while the pandemic surges in various locations. For other advisors, clients’ acceptance of these platforms has enabled more efficient meetings, with many preferring to meet virtually for some or all client reviews.

As our new environment continues to evolve, it is important to consider the risks associated with virtual meetings. Are we taking necessary steps to securely transmit confidential information? Now is the time to reassess and address cybersecurity with our clients. If we use electronic insurance applications, how are these protected? What is the possible impact on the client of an inadvertent disclosure of privileged or confidential information? Given this information, consider each client’s circumstances and discuss concerns and preferences with them.

When should you say no to a prospect?

When a prospect’s request causes you to feel uncomfortable, pause to reflect on the ethics of the situation. Don’t ignore your intuition — take time to research the request and determine whether honoring it would go against applicable laws or regulations.

An example of a prospect’s request is rebating, the practice of an advisor paying the client partial commissions. This request can be common when the prospect is from a culture that is used to negotiating every transaction, but it is illegal in many locales and could put our licenses at risk. When confronted with a request for rebating, we can explain that the service an ethical advisor provides them is worth more than what a competing advisor might promise in a rebate. To easily navigate these situations, we can proactively outline how we are paid and the services we provide in an engagement letter, given to each client at the start of the relationship.

If a prospect’s request persists, it’s best to refuse to work with the individual and move on to other prospects.

Round the Table magazine cover

Read the March/April 2022 Round the Table online.

Abiding by MDRT’s Code of Ethics ensures that we promise to deliver the best possible advice. Reference the example set by our fellow members in the success stories shared in Round the Table magazine and online at mdrt.org to maintain a successful, ethical practice.

MDRT Code of Ethics

Members of the Million Dollar Round Table should be ever mindful that complete compliance with and observance of the Code of Ethics of the Million Dollar Round Table shall serve to promote the highest quality standards of membership. These standards will be beneficial to the public and the insurance and financial services profession. Therefore, members shall:

  • Always place the best interests of their clients above their own direct or indirect interests.
  • Maintain the highest standards of professional competence 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 their clients’ affairs.
  • Make full and adequate disclosure of all facts necessary to enable clients to make informed decisions.
  • Maintain personal conduct which will reflect favorably on the insurance and financial services profession and the Million Dollar Round Table.
  • 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 they do business.

This was excerpted from the March/April 2022 Round the Table article “Refocus on ethics.” Read the March/April 2022 Round the Table online.



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