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Knowing Where To Draw The Ethical Line

admin | October 28, 2011 | 0 Comments

ASPPA News from the Field
2011 Annual Conference

WASHINGTON (October, 24, 2011) The client has financial problems and hasn’t paid your invoice. The salary deferrals to the 401(k) plan are overdue and a plan participant is now calling with a question about a loan. And to make matters worse, the tax return for the plan is due in two days. “I want to give you an outline of how you respond when you are facing an ethical dilemma,” said Lauren Bloom, attorney and the founder and CEO of Elegant Solutions Consulting who lead the General Session, Ethics for Pension Professionals, during the October, 2011 ASPPA Annual Conference in Washington, D.C.

These are some of the hotspots a pension professional frequently faces as well as professional qualifications, conflicts of interest inherent in the business, confidentially, unreasonable goals and objectives not necessarily yours, and the joy of communicating bad news. She also said that these are the kinds of situations that get you in trouble, but if you are ready for them you can handle them. She told the audience to think about ethical issues; they would know what they are as they are the one’s that “make you sick to your stomach”. It is important to have a plan before you enter into an engagement or go to a meeting. Think about what is likely to happen and know “where you will draw the ethical line” said Bloom. If you know where you will draw the line you will be better prepared. “I can’t tell you how many cases I have seen over the years of well intended people who were fundamentally very ethical but who got lead down that proverbial slippery slope step by step into that something I know they regretted later” Bloom stated. Knowing where that line is allows a pension professional to be able to step away.

Ethics are doing the right thing. Bloom said, “in business, as in life, it’s all about the relationship. And since “good relationships are all about trust, the question becomes what inspires trust?” Bloom discussed the elements of trust starting with honesty indicating that honesty means telling the whole truth and nothing but the truth. It also means telling the truth on time and not when it is no longer relevant. As Bloom said “there is nothing like coming late to the party with a disclosure”. Bloom added, honesty is “respecting peoples’ proprietary information.”

Bloom stressed the importance of dependability as an element of trust. Dependability is keeping promises and if you cannot, explaining to your client why not and making amends. It is meeting deadlines. Dependability includes being available to your clients to answer their questions; this helps them know they can trust you. Bloom told the audience that she had really bad news, that they would make mistakes from time to time. But if you are “accountable for your mistakes, if you are honest about them and you admit them, it enhances trust.”

Fairness as element of trust is the ability to put personalities aside, to allow merit to win the day and to give and receive incentives that are appropriate. Transparency is an easily understood concept for the pension professional: disclose, disclose, disclose.

Bloom suggested that integrity is the element of trust that brings it all together; it is walking the talk. A pension professional with integrity puts their client’s interests ahead of their own.

Bloom stressed that legality is a hot spot for attendees as they have to comply with the letter and spirit of the applicable laws as well as satisfy professional standards and codes such as ASPPA’s Code of Professional Conduct. This code is the standard for ethical conduct for all ASPPA members. Bloom reviewed the Code and telling the audience they are bound by it and “if you haven’t read it, read it, abide by it”. There is an ASPPA task force updating the ASPPA Code of Conduct with an exposure draft expected next year.

In sum, ethics is doing the right thing at the right time and asking for help with you need it.

—Miriam G. Matrangola, Esquire, QPA, QKA
President, Atlantic Pension Services, Inc., PA
ASPPA Member since 1997