The virtues called Ethics & Integrity
Written By Suresh Sadagopan
Medical students take the hippocratic oath when they complete their education. They take the oath to indicate that they will always use their knowledge for the benefit of the patient, in their best interests & would act ethically. Such an oath is warranted as they are dealing with peoples’ health, even their very lives. Their profession hence comes with great responsibility & they need to discharge their duties diligently & competently.
But, should this expectation be limited to the medical profession? Is just competence & professionalism good enough from a domain expert?
The answer to both of the above questions is No. Almost all professions require a high level of professional competence & diligence. In most other professions, there is no equivalent of the hippocratic oath. But, what the Hippocratic oath signifies is important to every profession.
The Important Duo
The essence of the oath is ethics & integrity. Ethics are moral principles that govern a person’s behaviour. Integrity is the quality of being honest and having strong moral principles. These two are close to each other in terms of what they signify.
Ethics and integrity are what attracts people. It is what makes one dependable & trustworthy. Without these, it is not possible to repose faith. The bond of trust cannot be formed and the relationship would lack strength.
These apply very much to the domain of financial advisory as well. However, finding a reliable, trustworthy advisor is a herculean task in the financial domain.
Regulation as a Saviour
Regulations are brought in to protect consumers and to ensure good conduct. However, regulations only impose a base minimum, which the participants have to comply with. This becomes the bar which everyone has to jump over. The real good ones would reach far and beyond the limited requirements imposed by regulations.
The problem we encounter in the real world is that regulations are treated as a nuisance that needs to be put up with, while doing business. Hence, businesses try to comply with regulations in letter and not in spirit. You see surrogate advertisements for liquor brands selling club soda or cut glasses – that’s a classic way of beating the ban on liquor advertisements. The advertiser cannot be caught, but is clearly violating the spirit of the liquor advt ban.
Finance is a very important area in a person’s life. All of us work for 35 years or more to earn money to take care of all our needs & goals. However, most people don’t understand this area well. They do what they can and hope for the best. The need for ethical advisors is very acute in this area since finances are a critical portion in one’s life.
Education, certifications, experience etc. are important and are expected of every advisor. Knowledge, expertise and a certain felicity with numbers is expected of any financial advisor. But ethics and integrity is what will separate a great advisor from the vast, teeming mass of advisors. Advisors need to act in their client’s best interest as Fiduciaries.
Fiduciaries are those who put their client’s interest ahead of everything, including their own. Fiduciary standard makes one puts their client’s interest first. It is gaining currency across the world in the financial advisory domain. To be a a true Fiduciary, the advisor needs to eliminate or minimise the conflicts of interest.
One of the major conflicts of interest most advisors have is that they get commissions from product originators, on products they recommend to clients. A true Fiduciary needs to avoid this conflict and needs to receive remuneration only from their client & no one else. This would enable the advisors to deliver solutions that are truly in their client’s best interests.
Acting with Ethics & Integrity
Let me narrate an anecdote that I heard a long while ago, which has stayed with me. A sculptor was chiseling a statue of a goddess. There were a number of onlookers who were admiring his work. There was another similar statue nearby. One of them asked if he was commissioned to carve two statues of the same type. The sculptor said that the first one had a flaw and hence he was creating another one. . The person who asked the question went close to the other statue and was struck by the perfect beauty of workmanship. He was surprised that the sculptor was saying that there is a flaw in that statue. He mentions that to the sculptor who stops his work, comes over to the other statue and points out to the small chip-off on the otherwise perfect nose.
If no one will even notice, why are you doing it – the onlooker wanted to know. The answer of the sculptor is priceless. He said,”I know that no one will notice it, considering that it will be about 45 feet above the ground on the temple vimana. But, I know it has a flaw and hence had to create a new piece. It’s not for anybody that I’m doing it… it’s for me. I’m answerable to my conscience”. That is ethics & integrity shining like a beacon. It is rare, priceless. Those endowed with it shine like the sun in their professions and are miles ahead others. Along with them, their clients will go far, really far.