The Ethical Financial Advisor

[dropcap background=”” color=”” circle=”0″]A[/dropcap]s you probably already know, being a financial advisor means practicing a certain degree of ethical behavior whenever you deal with your clients. However, it’s important to recognize how ethical behavior should guide you as a financial advisor. Being ethical is about more than being fair; it’s about how financial advisors like you and I approach the entire profession.

Diligence

First, in order to be a successful financial advisor, you need to be a diligent one. To put it simply, this means that you will work hard in the pursuit of your client’s best interest. A client who knows they have a diligent financial advisor on their hands simply trusts that you are giving them 100%. It’s about more than just talent and knowledge, then. It’s about putting forth however much effort it takes to leverage those two things toward helping your customer.

Independent

Your customers are paying good money for your expertise. They aren’t paying good money to have you read The Wall Street Journal or read online forums where people talk about investing. While it’s perfectly acceptable, even advisable, to look outside yourself for information you can use to help your customer, remember that it’s you they’re investing with.

In order to act independently as a financial advisor, you have to invest in yourself as well. Never stop learning, never stop training and never stop pushing yourself. The moment you slack in any of these three areas, you just gave your customer a great reason to go somewhere else with their business.

Objective

Along the same lines, you must be objective in your judgment. There’s not a financial advisor out there who hasn’t had trouble in this area at least once or twice during the course of their career. Eventually, you will run into a situation where Option A and Option B are on the table and you’re having a tough time knowing which one is best for your customer. I’ve definitely experienced this challenge and, again, so will you.

Ironically, one of the easiest ways to be objective here is by searching out the opinion of others. Find two people you trust who are on either sides of the argument and listen to their reasoning objectively. This is also where forums, publications and other sources on the Internet can come in handy too. All you have to do is remain objective in assessing the arguments put forward.

Thorough

There is no chance of succeeding at being a financial advisor if you aren’t going to be thorough. This refers to every aspect of your job. You need to do it thoroughly, meaning dedicating yourself to a task 100% from beginning to end. Be thorough in your advice, too, so that you consider it from all angles before recommending a path for your client to take.

Customers can tell when you’re not thorough. It comes across in the information and even the way you deliver it. They’ll respond by shooting holes in your work and the upshot will be you’ll soon lose them as a customer.

Either be thorough as a financial advisor or find another job.

Continually Improve

With these four ethical guidelines under your belt, you’ll go far—a lot farther than most of your competitors. However, if your goal is to become the best, then dedicate yourself, each and every day, to continually improving.

The world of finance is too vast for anyone to ever completely understand, but that means that if you stand still, so to speak, you’re only going to lose ground. Instead, keep learning, keep talking to others in your industry, keep reading, keep taking notes, and keep learning from your mistakes.

Ethical behavior is about more than reporting conflicts of interest or treating all your customers the same—though those areas are certainly vital. Instead, I believe it is just as important that you treat your own role ethically by reflecting on the five areas above.