Advisor Today - July/August 2016 - (Page 11)

PRACTICE SPECIALTIES A QUESTION OF ETHICS By Frank C. Bearden, Ph.D., CLU, ChFC Reflections on the DOL Fiduciary Rule The question we should ask is: What is our ethical responsibility in light of this significant change in regulations? T he Department of Labor (DOL) issued the Fiduciary Rule on April 6 of this year, and most people involved with financial services are aware of the rule by now. NAIFA was very active in voicing concerns about the rule to the DOL through interaction at various levels. In an Advisor Today Blog post, NAIFA CEO Kevin Mayeux, CAE, noted the extent of the association's involvement, the improvements made in the final document thanks to NAIFA, and the fact that "our work is not finished." The question each of us should be asking at this time is: What is our ethical responsibility in light of this significant change in regulations that affect our clients, the companies that produce and sustain the products they rely upon, and our profession? Applying the NAIFA Code of Ethics What does the NAIFA Code of Ethics tell us? While all nine obligations in the Code are pertinent, two are particularly applicable here: * To obey the letter and spirit of all laws and regulations which govern my profession * To protect the financial interests of my clients, their financial products and my profession, through political advocacy. We may feel at times like these two obligations are contradictory and that we should select one directive or the other. But, the Code is not written with this spirit, and each obligation is important. These two directives clearly describe the work NAIFA leaders and members have been doing, and their example makes the path that the rest of us should consider easier to follow. In the various environments in which we lead our professional and personal lives, we should seek opportunities to embody and encourage compliance with the laws and regulations that frame our profession. Actions often carry more influence Exercising political advocacy is the constructive way to earnestly seek improvement. than words, and displaying quiet and responsible behavior as we serve our clients is more constructive than we may realize. In any situation, doing what is right is always a good decision, not just when someone is listening. Exercising political advocacy is the constructive way to earnestly seek improvement, especially in the laws and regulations that provide the boundaries for our profession. NAIFA leaders have repeatedly demonstrated through engagement with the DOL how constructive criticism, offered in a spirit that seeks improvement of the DOL rule, is an effective strategy utilized on behalf of our clients and our profession. Again, in the environments in which we work and live, we should do no less. There is a silver lining in the midst of the tremendous change financial advisors face with this rule. Financial advisors have worked diligently for at least the 41 years I have been privileged to be an agent and then an advisor, and to see our profession accepted by other professions. The subject of the DOL Rule is the fiduciary standard of care, and a number of financial advisors are being positioned as accountable to that standard. Without discounting the tremendous amount of effort and expense that will be involved in responding to this legal and regulatory change, could this also be a sign that our profession is gaining some of the recognition we have long sought? Frank C. Bearden, Ph.D., CLU, ChFC, is managing member at Ethics Consulting. Contact him at or at 210-724-1958. July/August 2016 | ADVISOR TODAY 11

Table of Contents for the Digital Edition of Advisor Today - July/August 2016

From the Editor
A Question of Ethics: Reflections on the Dol Fiduciary Rule
Getting the Wealthy Investor to Hire You
Positioning Whole Life for Success
Rewarding Clients for Engaging in Healthy Activities
Feel the Heat: Sizzling Strategies for Boosting Worksite Sales
The Challenges of Writing Business Insurance
A Lifetime of Success
Safeguarding Your Business Interests
NAIFA Presents Nominees for Election
What’s Behind Brand Magic?
Making an Effective Call Back
A Story for All Your Clients
Ideas to Expand Your Practice
Advertiser Index
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Advisor Today - July/August 2016