It was an honor to address the Retirement Management Forum, an annual conference of Retirement Management Advisors sponsored by the Investments and Wealth Institute (IWI) in Hollywood recently, well Hollywood, Florida that is. I spoke to IWI conferences in 2015 and again in 2017 so it felt like being reunited with old friends.
Established in 1985, the organization has over 10,500 members who manage portfolios which are more than 7 times the industry average and advise more high-end clients than any other advisors in the industry. Their affiliations range from the smaller independent shops to Charles Schwab, Wells Fargo Financial Advisors and Bankers Trust, among others.
The mission of the Investments and Wealth Institute is to deliver premier investment and retirement consulting and wealth management credentials and world-class education. They do an amazing job and offer the RMA, CIMA and the CPWA certifications, which are held in very high esteem in this industry.
IWI is well known and respected for setting the standards and practices for investment management consulting practices. They offer the premier retirement, investment consulting and wealth management credentials in 28 different countries, and sponsor educational conferences, research and publications that are considered the best in class.
When I spoke to their group in 2017 I had noted the strong parallels between the break down in ethics in banking, the resulting legislation and the unintended consequences their industry was facing and to some degree still face today.
The Department of Labor (DOL) was then proposing new rules including the “DOL fiduciary rule” which would have mandated financial professionals disclose more information to their clients than was previously disclosed.
And this year discussion of ethical behavior continues to be front and center.
After introducing Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics at Duke University and his conflict of interest research findings, I said a few who are dishonest can cause the collapse of the entire system.
Dr. Ariely’s research points out that human nature is such that when someone has a personal interest in an undertaking, there is a general tendency to choose their personal interest over the ethical alternative.
What is interesting about Dr. Ariely’s premise is that even if there is a code of ethics to refer to and there has been exposure to it, unless it is top of mind and people are continually reminded of the need to take the high road, there is still a tendency to go with their personal interests. With continual reminders there is less evidence of this.
It is critical that reminders of ethical behavior and high expectations are talked about, not just parked in a file folder or on a shelf.
It was a privilege spending time with a group that advocates for strong ethical practices and continues to raise the bar with educational offerings and certifications that focus on both theory and practical application. Knowledge, awareness and practice are ever more critical to ethical practices.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
