Continuing Education for Financial Service Professionals
Red Flags of Unethical Conduct: Case Studies Laid Open for Learning
Copyright 2015 CLIFE Inc. All rights reserved. Any reproduction of parts or all of this book and its contents by any means electronic or mechanical is prohibited.
& Red Flags of Unethical Conduct is relevant to all those who work in the financial services industry or in association with life insurers. The information in the course is provided for educational purposes only; it should not be construed or interpreted as providing advice. This information is provided for informational purposes for members of the general public.
Agents and advisors should always seek guidance from their principals and compliance experts in regards to informing themselves and others about details of the products they sell and other considerations of their business.
&ď€ We welcome all feedback and suggestions for additions to the course. Please send your comments to info@clifece.ca.
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www.clifece.ca Red Flags of Unethical Conduct provides continuing education credits upon satisfactory completion of an online test. Please see the website for details or email info@clifece.ca.
TABLE OF CONTENTS Introduction
1
The Two Standards of Ethics
2
Kick-start Your Ethical Thinking
4
The Codes and You
7
Find the Meaning
13
Case Studies
15
Fraud and Ethics
25
The Possible Failure of Punishment
26
Decisions: Make Them Right
28
Exercise Solution
30
Introduction
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The objective of this course is to provide a framework for ethical principles on which advisor behaviour can be modelled.
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Case studies are included to illustrate ethical dilemmas, and the principles that apply to guide a course of action.
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These scenarios show some of the red flags of unethical behaviour.
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Supplemental learning is available through the website links embedded throughout the course.
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Readers are also encouraged to visit the site for the Markkula Center for Applied Ethics at Santa Clara University (http://www.scu.edu/ethics/), which is a forum for research and discussion in all areas of applied ethics.
1
The Two Standards of Ethics
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Ethics is two distinct standards: 1. The standards for behaviour that prescribe what you should do, and should not do, for example:. o
You should be honest, compassionate, and loyal.
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You should not commit fraud, steal, nor violate a person’s right to privacy.
2. The development of those standards in oneself. This is the so-called moral compass that shows you how to behave in light of the ethical standards you have learned or recognize. o
You should continuously study your moral beliefs and moral conduct to measure where you stand against the prescribed standards.
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Therefore, ethical behavior results from understanding the standards, and applying them to your own behaviour.
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Ethics applies to your: o
Clients;
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Prospects;
o o
Colleagues; Family and friends;
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Employees and employers;
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The public at large;
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The financial services profession.
Ethics is an on-going process of questioning your behaviour, making choices, and taking action based on those choices.
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All three elements are required; the absence of any one can lead to a failure of ethics.
2
The Ethical Triangle ETHICS ACHIEVED!
Make choices Question behaviour
Take action
All three sides of the triangle contribute equally to its whole. In ethics, all three activities are required to bring about ethical outcomes. Š CLIFE Inc., 2015
3
Kick-start Your Ethical Thinking -
Ethics applies in all situations in which personal values are called upon to arrive at an opinion or decision. o
Your personal values create a moral compass that is unique to you.
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Where does your moral compass lie on some of the ethical issues of the day?
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The following questions highlight some societal issues to illustrate that ethics is both a personal matter and simultaneously a matter of the common good, also known as the greater good.
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There are no “right” or “wrong” answers; the purpose of these questions is to challenge your thinking about how personal values enter the ethics conversation.
Should the government have access to all personal emails and electronic communications of its citizens? Yes No Maybe Should the government have access to all personal emails and electronic communications of its citizens because it uses the information it gathers to safeguard the security of all citizens? Yes No Maybe Should euthanasia of people be legalized and become a human right, available to anyone at any time of their choosing? Yes No Maybe Should a person who is terminally ill, debilitated by constant and severe pain, with no hope of treatment be able to choose to end his life? Yes No Maybe
Is it suicide if a person chooses a course of action that will end his life if he saves the lives of others in the process? Yes No Maybe Should a person visiting Canada and convicted of a heinous crime during his stay be repatriated to his home country where he will most certainly face capital punishment? Yes No Maybe Should a person convicted of financial crimes against individuals be forced to pay back those individuals even when they agreed to undertake unlimited risk in their pursuit of financial gain? Yes No Maybe Is it right to use unpaid interns to replace paid employees in financially sound companies? Yes No Maybe Should mammals be used in medical experiments when the research will lead to the development of new drugs? Yes No Maybe Should mammals be used in medical experiments when the research will lead to the development of new cosmetics that will be used by cancer survivors? Yes No Maybe -
You may have answered “Yes” to every question; that’s because every answer can be right depending on ethics and values. The opposite is also true: “No” answers can be equally right and valid depending on ethics and values.
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Ethics are personal because what is right to one person may not be shared by another. It is necessary to find the common ground for ethics to exist. The common ground is laid out in two forms of codes for ethics.
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