FASEA needs to ensure its ethics course for financial advisers goes beyond hypothetical scenarios and fosters courageous ethical behaviour.
Earlier this year, FASEA released the draft Code of Ethics for financial advisers and announced that all advisers, regardless of their academic achievements, would be required to complete a Code of Ethics unit to meet the qualification requirements.
Within days of the code's release the Cricket Australia ball-tampering scandal made headlines. While I must confess I have little interest in cricket (I have only ever been to one game), I have been intrigued by the situation. As it continues to play out before us, I can’t help but reflect on the insight that it provides into human behaviour and how we can use this knowledge to ensure the ethical conduct training advisers are required to complete does more than just tick a box.
Research would suggest that most people don’t consciously set out to engage in unethical behaviour. While we all want to believe that we are ethical and adhere to our values, evidence shows that under real-world pressure, such as a boss demanding an immediate result, even the most ethical and compassionate people can be persuaded to betray their own values in the face of a challenging situation. Our actions don’t always reflect our beliefs and values.
Our inability to do what we know we should can generally be attributed to one of two factors:
1. The bystander effect. This term is used to describe a phenomenon in which the presence of others discourages an individual from intervening in a situation; and
2. Ethical fading. An erosion of the ethical implications of our actions and/or decisions from our minds, that allows us to engage in or condone behaviour that we would condemn if we were consciously aware of it.
In the case of cricket captain, Steve Smith, it’s alleged that he had knowledge of a potential plan to tamper with the ball and while he expressed his dislike of the plan, he did not attempt to stop it. From the sidelines it’s easy to criticise his decision. Surely as the captain Smith had both the responsibility and means to shut the idea down. Yet for one reason or another he didn’t.
Smith’s actions remind us that it takes more than a title and a well-articulated artefact to encourage ethical behaviour. For the most part we know right from wrong and we genuinely believe that we would make the right ethical decision if push came to shove.
Consequently, a truly effective ethics program needs to go beyond hypothetical scenarios. It needs to help participants identify and get comfortable with their fears and then teach them how to tackle them. We need to ensure that when advisers find themselves being asked to do something that goes against their ethics and values, they know how to recognise the situation for what it is and have the courage to respond ethically.
As Theodore Roosevelt said, “Knowing what's right doesn't mean much unless you do what's right.”
Christine Bau is founder and principal of HR consulting firm People Focused.
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