Ethics for Retirement Plan Professionals

October 29, 2012 ( – When considering ethical behavior, the question is not “what would you do?” but “what should you do?”

Speaking at the ASPPA Annual Conference, Dr. Bruce Weinstein, contributor to Bloomberg Businessweek and author of “Ethical Intelligence,” said there are five life principles to follow to behave ethically. The first principle is “Do no harm.” A plan sponsor can harm participants by sharing confidential information or lying to a participant about a mistake made in his account. A financial adviser can harm clients by consciously overcharging them or recommending an action that is not appropriate for their plans.  

Weinstein’s second principle is “Make things better.” A plan adviser helping a plan sponsor that is struggling with loan administration is making things better. A plan sponsor that admits it used the wrong compensation to calculate a participant’s benefit and corrects the mistake, is making things better.  

Weinstein said ethically intelligent people also take time every day to make things better for themselves, such as eating right or exercising. As an example he said staying home from work to rest when you have the flu is not only taking care of yourself, but it is good for business because you keep from making others sick and you may not do your best if you are sick or on medication.

The third principle Weinstein shared is “Respect others.” This means keeping confidential information confidential, telling the truth and keeping promises made. “Don’t make promises you can’t keep, and make promises you intend to keep,” Weinstein said.  

“Be fair” is the fourth principle. According to Weinstein, time management is ethical behavior and can show how fair a plan sponsor or financial adviser is with participants or clients. How one disciplines someone can also show fairness. Weinstein suggested offering constructive criticism using a “praise sandwich,” begin with something complimentary, state the criticism in a gentle or even positive way, and end with an affirmation, i.e. “You are always so diligent, I knew you would want to correct this.”  

Finally, Weinstein said the fifth life principle that leads to ethical behavior is “Care.” Treat others with care, kindness and even love, he said. He added that one should show sincere appreciation for others; it takes little effort and causes both the giver and receiver to feel better.  

Weinstein noted that clients give their business to those they trust, and the best way to earn and maintain that trust is through the five principles. Plan sponsors also want participants to trust them.  Living by the five principles is “not only the right thing to do, it’s the smart thing to do,” Weinstein concluded.