Advisor Today - November/December 2015 - (Page 19)

practice specialties A QUESTION OF ETHICS By Frank C. Bearden, Ph.D., CLU, ChFC Dealing with Client Confidentiality All client information should remain confidential in the office and with appropriate employees of the larger organization. I n the first column I wrote in September 1998 for Life Association News, the predecessor to Advisor Today, I addressed an ethical issue I had encountered in my responsibilities as a branch manager of a financial-services office. The issue was confidential information, which has come to my attention again as an ethics consultant. I thought the issue should be revisited. Let's consider a brief hypothetical incident involving confidential information. Ronald Johannson was concerned about replacing the group term life insurance he had with his employer after he was downsized from his position. When the layoff occurred, he did not think to review any conversion options he then had, and decided to purchase term insurance at least until age 65. Ronald was 50 at the time. He contacted Roger James through a referral to complete an application for 20-year group term insurance. Roger discussed various forms of permanent insurance with Ronald, but he was not interested due to the premium difference. He did make a note to himself to consider a term conversion later, which Roger discussed. In the course of answering the health questions, Ronald noted no health history, verbally stating that the only problem he had was stress from dealing with his son's recent diagnosis of leukemia. Roger asked how the son was doing and was told he was in remission. With this comment, Ronald completed and signed the application. He was told the coverage would be evaluated in about a month and chose not to pay an initial premium. Shortly after Ronald left Roger's office, Will Carlton, one of the Ethical values are those that strongly influence our behavior. employees from the office, came in and asked about Ronald. He stated he had met Ronald in another organization. Roger stated he seemed fine, but had a lot to deal with, considering his recent job loss and his son's recent diagnosis of leukemia. Will was not aware of these occurrences. That evening, Will told his wife about Ronald's experiences and she told her best friend, Marge Champion, the next morning. The Johannsons, the Charltons and the Champions were members of the same country club and were acquainted. Marge called Mrs. Johannson that afternoon to express her sympathy for what had occurred in her family. Mrs. Johannson was embarrassed and surprised that Marge had this information, and with some struggle over the phone, managed to ask her how she knew of both occurrences. Marge then struggled as well, and would only state that an acquaintance told her. After his wife shared what she discovered with her husband, they considered speaking with an attorney. Learning from this incident What can we learn from this? Your first reaction from this incident may be to consider what, if any, legal problems Roger James created by sharing the information about his client within his office. However, even if there is no legal issue, the larger issue is the value we place on client confidentiality. Ethical values are those that strongly influence our behavior, to the point of bringing us to question and redirect our behavior before violating them. Roger should have limited his comments to "Ronald seemed fine." Some client issues have to be shared within the office, such as consulting on proper procedure on a client's behalf. In those cases, are we satisfied that our associates in the office sufficiently value the client's privacy? One way to encourage privacy in client information is to have and promote within the firm a policy that all client information remain confidential within the office and among appropriate associates of the larger organization. Frank C. Bearden, Ph.D., CLU, ChFC, is managing member at Ethics Consulting. Contact him at fbearden@ or at 210-724-1958. November/December 2015 | ADVISOR TODAY 19

Table of Contents for the Digital Edition of Advisor Today - November/December 2015

From the Editor
New Products
In Step with a Winner
Finding Success in the Chinese-American Market
Dealing with Client Confidentiality
Hashtag Your Way to Social Media Relevance
Starting the LTCI Conversation
From Term to Perm
Protecting the Downside with Allocation Adjustment
Jules Gaudreau: A NAIFA Success Story
Helping Clients Cope with Market Volatility
NAIFA Government Relations
Working with Single Women
Financial Planning FAQs of Small-Business Owners
Three Retirement Conversations to Have with Clients Today
The Advent of Robo-Advisors
Moving into the Retirement Space with 401(k) and 403(b) Plans
Moving the Sales Process Forward
Cultivating the African American Market
The Lighter Side of LIfe
Advertiser Index
Back Page

Advisor Today - November/December 2015