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The Need for Professional Conduct in Competitive Situations

June 19, 2014
<img src="" alt="" width="300" height="200" class="wp-image-354 size-medium" /> Financial Advisor Tip: The need for professional conduct in competitive situationsAny Advisor or Agent with more than a few months of experience should be able to tell you with conviction that Advisors and Agents alike should conduct themselves as though their every action was under a microscope with clients at the other end. The reality is that this teaching, while integral to the ethics of our profession and for business conduct in general, can often fall apart in the form of professional conduct in competitive situations. Those situations where advisors might be present in the same room with different beliefs on what is best for the client can sometimes digress into very amateur, immature bouts of bickering, arguments, and even extreme emotional outbursts. <br /><!--mep-nl--><br /><!--mep-nl-->As advisors, we are often asked to comment, critique, and advise further action to a client based on another advisor's recommendations; differing views are often kept at arm's length by the client from one another in order to harness objectivity from either side. In some cases, it becomes necessary to bring these viewpoints together in the same room for the purposes of understanding the greater good of the client and, in some cases, because multiple good ideas are present and there is difficulty choosing the best path. In other situations, an outside advisor may be commenting on a solicitor's presentation or advice. In any of these situations, the manner in which we conduct ourselves as advisors can reflect to the client which side truly has the client's best interest in mind. Also present in these situations is the potential for an entrenched advisor to be on the defense.<br /><!--mep-nl--><br /><!--mep-nl-->Often in competitive environments with entrenched advisors we are faced with certain obstacles regarding how the client views the incoming advisor's advice against the knowledge the client currently holds, typically garnered from their current or entrenched advisor. Now, whether you find yourself as that entrenched advisor or the new advisor we all must adhere to a code of conduct that allows the client to hear both sides clearly and concisely. It is only through this manner that objective thought can shine. Any arguments or disputes between advisors immediately lower the efficacy of both lines of thinking and force the client to "choose a side" which is really the last position we want any client to be in as it is uncomfortable and rarely helpful to the client's overall financial picture. What is important in these cases is that the client is allowed to leave the meeting with two (or more) objective ideas or proposals that they can be given time to process and decide upon. Only by presenting solid evidence and a clear case can either advisor hope to secure their position.<br /><!--mep-nl--><br /><!--mep-nl-->As advisors we are all aware of or have been through, these scenarios. In the last ten years of operating amongst some of the highest net worth groups and their advisors, I can tell you that positive outcomes are rare when a client is not given a full and complete picture of each advisor's point of view. While we are not always granted the time and space needed for presenting our ideas, we must be mindful that we deliver all the important data clearly and allow our competitors to do the same. It is this environment that makes us all better advisors and better communicators. It is simple fact that we won't win every case, but whether our advice proves superior or inferior, we will have learned and grown from the experience in order to be more competitive in the future.<br /><!--mep-nl--><br /><!--mep-nl-->My advice to advisors is simple: put your best advice forward and allow the client the space to make a sound decision.<br /><!--mep-nl--><br /><!--mep-nl-->My advice to clients is likewise just as simple: allow your advisors to present a complete picture and never refrain from asking tough questions. <br /><!--mep-nl--><br /><!--mep-nl-->In the end, advisors serve the client, weighing options through the lens of long-term benefit to current and future needs. Every advisor has a "good idea" but who's idea is best is up to the client to determine, but clients should use caution with the advisor who works for "free" as this is a professional environment and every advisor has something to gain from the client and this may not always be monetary in nature.

The information provided is not written or intended as specific tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalties. MFG, its employees and representatives, are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

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