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Does society have an expectation that financial advisers should maintain the high ethical standards in their duties? Can the wrong doings of a few, damage the reputation of the whole industry sector?

High Ethical Standards in Society

High ethical standards have always been considered important in society. Potter Stewart clearly states, ‘Ethics is knowing the difference between what you have a right to do and what is right to do.’ In whatever activity you are taking part in the society has always tried to encourage people to abide by the ethical standards. The finance advisers are not exempted in this case since they are a part of the society. Ethical standards portray a decent and well-organized community. Ethical standards are the trademark of products and services offered by a company that promotes values such as trust, fairness, and kindness within organizations and outside. Ethical standards are very important in organizations the reason they are considered to be essential is: they provide a guideline on how to run a business, they instill good leadership and management skills in the leaders and employees, they help deal with dilemmas and guide employees on how to handle situations.

The society has always had the expectations of financial advisers maintaining high ethical standards. Some of the ethical concepts that have always been considered important in the society to determine high standards and show the stand of the society on ethics are discussed below.

Financial advisors are charged with the highest standards of loyalty and discretion. For any financial adviser, they are always required to portray the highest degree of competence and integrity. The aspect of loyalty and discretion has been nurtured in people from when they were young. For example, when given an instruction the child was not expected to do the opposite of that. As a result of that, the society expects that from the basic things that were taught ever since the financial advisers were young they would always abide by them (Hinman, 2013). All of them are always instructed to stand by the decisions that are in the organization's interest even when they are not common. To maintain high standards that are expected by the society a financial officer is expected to understand the rules and regulations about his or her profession and know why the rules and regulations are important. To avoid falling out of the high ethical standards, they are best advised to interpret and apply rules best to their intention and be able to perform their advisory duties effectively and efficiently and still abide by all the stipulated rules. When they are loyal to the rules and regulation, they take the first step of maintaining the high standards that are expected of them (Groarke, 2011). When they begin being loyal and respecting the rules, it becomes a part of them, and it is no longer hard for them to act in the same way. High ethical standards have become important to the society such that they have come up with consequences that anyone who falls short of the requirements is punished accordingly.

Financial advisers are expected to maintain superior standards of integrity and moral values. Integrity is identified as one of the most paramount standards of conduct in the financial sector of any organization. Integrity is mostly determined by the personal behaviours of a person, e.g. honesty and truthfulness. The society considers integrity as an important factor of ethical standard to the extent they have set up Anti-corruption commissions to investigate instances where they note the people involved didn’t practice integrity. Integrity to a financial advisor means believing that the trust given by the public should not be compromised (Fitch, 2014). A financial adviser can demonstrate integrity by upholding the principles of their profession, demonstrating the values of the profession, acting without any consideration of personal gain, resisting undue political and environmental pressure when making decisions, not abusing the power of authority and taking immediate actions in cases of unprofessionalism. As a financial adviser, the guideline that one should follow are the duties rules regulations written down in the company’s act and constitution since it goes hand in hand with the terms the society considers important. A lot of power is handed to them, and it's the expectation of everybody that they may take the most appropriate action. Most of all the society is not made up of a single tribe or religion which should be emulated by all professions whereby they treat all people as being equal.

Expectations on Financial Advisers

Impartiality and fairness. Impartiality implies objectivity, lack of bias, tolerance, and restraint especially when there occur tribal and regional disputes. Impartiality is a very important ethical standard to hold as a financial advisor. Fairness should always be a top priority in any profession since that is the norm the society has been insisting on (Smith, 2010). In the profession, you shouldn't select whom you will serve because of their profession or because of something similar to yours. Just like when they go to churches and other offices, they are not thrown out it is important for the financial advisors to understand they are expected to work in the same way. Being a financial adviser, they meet with all types of clients, and it is the expectation of all that the clients be served equally and treated equally. Just like people don't like to be treated unfairly it is best if they treat the people they come across fairly, the society aims upon ensuring there is fairness amongst all people despite the social class or living conditions. That is what maintaining high ethical standards are about. The society has played a big role in instilling traits of fairness in people whereby it is expected that all people keep it in practice to uphold the ethics (Marit,  Ramklint, Hansson, Haglund, 2014).

Transparency. It refers to the unimpeded visibility. Financial advising involves accountability for all the actions you are involved. Transparency is also considered as a paramount trait in professions. All actions taken are subject to scrutiny, and it is important to ensure no ugly information is hidden on your end. Financial advisers should always ensure that in case of scrutiny all information discovered will not ruin the image of the organization. In transparency, internal scrutiny may be carried out which only affects the environment within the organization (Berkovich,  Eyal, 2018).It seeks compliance with the standards of the organization. In cases where it involves confidential details or maybe a client should confidentiality be given an upper hand over transparency? In as much as a financial advisor wants to be open about all activities, they are involved in it important to keep the word given to a client that their information will be private (sandel, 2010). Breaking a client's confidence in a financial adviser is not a part of an ethical standard in as much as transparency is being maintained. In accordance to the terms of organizations most of them if not all insist that a finical adviser should not withhold any information from the organization which is a good way to handle problems that are bound to take place and affects the organization. The society considers transparency as an important trait but also not in matters that could ruin someone’s dignity. In such instances, they clearly state that their more appropriate methods to handle such a problem without breaking the code of ethics (Fitch, 2014).

Ethical standards have effects on organizations and individuals. With ethical standards it proves easy to build customers loyalty, to retain good employees, to create a positive working environment and to avoid legal issues. In some cases, the ethical standards may have a negative effect in case they lack good backing from the organization. The ethical standards will not provide any guideline since it gets no support (Rooney, Mandeville,  Kastelle, 2012).

Importance of Loyalty and Discretion for Financial Advisers

Simple mistake may end up ruining an entire industry. Any professional is advised to take their actions seriously. For example, an accountant when balancing the books, they may miss a couple of values. By missing those values, a company may end up announced as being bankrupt which is followed by the liquidation of assets to meet the debts. Financial advisers are urged to put their best foot forward to present the most appropriate and accurate work. Very small and careless mistakes that most people do not put too much concentration on might end up being held against their aims and expectations. It is very important for any of the organizations to encourage all their workers to ensure that they practice quality standards (Groarke, 2011). At least that is an assurance that things take place in the way that they are expected to be, and the organization is not about to suffer from lawsuits and other damages that are in place as consequences.

Some of the consequences that are as a result of non-compliance to ethical standards for a firm fine, penalties and in some cases jail term for the business owner. These consequences in most cases have a financial impact due to the time and cost wasted, in some instance it may have a negative impact on the morale of the employees. Noncompliance in the individual level is costlier since it might end up tarnishing a company’s image which may result to loss of customers, damage to staff loyalty and employee turnover. From this we basically realize that the quote by Camus Albert that states, a man without ethics is a wild beast loosed upon the world is so true since without ethics nothing ever goes the right way (Smith, 2010).

From the comparison of values of both organizations with ethical standards and those with no it clearly indicates those with ethical standards perform better. Approximately an organization with ethical standards will have a rating of around 35 in employee performance while those with no have a rating of 24, in customer satisfaction the rating for companies with ethical standards will be 40 while of the other company is 22. In the quality of services, the rating for ethical organizations is 39 while for the other is 20. Finally, for the morale of the organization that is ethical is 37 while for the other organization it is 23 (Smith, 2009).

High ethical standards have always been one of the traits that people try to emulate. When considering institutions where they have no regard for ethical standards with one that considers that it is evident that the one with regard for ethical standard is more successful than the other. Financial advisers should be among the first encouraging the practice of professionalism, encourage loyalty to rules and regulations, transparency and confidentiality (Berkovich & Eyal, 2018). Professionalism is beyond getting to the office and working for your eight-hour shift. All should realize that being ethical, reliable effective in all the activities around the organization would work a great good for the employees and the organization at large. Ethical standards are the core factors of any stable organization, and all organizations should are based on such a foundation (Yeske, 2010).

References

Berkovich, I. & Eyal, O., 2018. Ethics Education In Leadership Development. Sage Journals.

Fitch, B., 2014. Law Enforcement Ethics: Classic And Contemporary Issues. Thousand Oaks, Ca: Sage Publishing.

Groarke, L., 2011. Moral Reasoning: Rediscovering The Ethical Tradition. Don Mills, Ontario: Oxford University Press.

Hinman, L., 2013. Ethics: A Pluralistic Approach To Moral Theory. S.L.: Wadsworth Publishing Co.

Marit, S., Ramklint, M., Hansson, M. G. & Haglund, K., 2014. Ethics Rounds An Appreciated Form Of Ethics Support. Sage Journals, Pp. 203-213.

Rooney, D., Mandeville, T. & Kastelle, T., 2012. Abstract Knowledge And Reified Financial Innovation.

Sandel, 2010. Justice: What Is Right To Do?. Farrar, Straus and Giroux, Newyork: S.N.

Smith, D. (2010). Ethics and Finance Advice. The Final Frontier.

Smith, J. (2009). Professionalism and Ethics in Financial Planning.

Yeske, D. (2010). Finding The Planning in Financial Planning: An Integrative Framework for Strategy Making for Financial Planners. SSRN Electronic Journal.

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