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April Is National Financial Literacy Month

Examples of Following the Code

NAIFA Foundation for Financial Security

The first example of ethical behavior comes from a decision by NAIFA to form the NAIFA Foundation for Financial Security, which is intended to grow the number of ethical financial services professionals to better serve American households and small businesses.

The Foundation is intended to increase the number of practicing advisors and will advance financial literacy and promote financial security among all Americans, with an emphasis on traditionally underserved and underrepresented populations. To this end, NAIFA returned for NAIFA's 7th Annual Diversity Symposium on May 23, 2022. 

Clearly, the involvement of NAIFA addresses three obligations of the NAIFA Code of Ethics:

  • To work diligently to satisfy the needs of my clients by acting in their best interest.
  • To present, accurately and honestly, all facts essential to my clients’ financial decisions.
  • To render timely and proper service to my clients and ultimately their beneficiaries. 

How to Prepare and Cope with Conversations About a Recession

We have a thoughtful second view of ethical recommendations from Simon Reilly, an Advisor and Loyal NAIFA Member since 2011. Simon has prepared a very pertinent set of recommendations entitled How to Prepare for a Recession and Tips for Coping with Stress in a Recession. Both sets of recommendations are thoughtful. How to Prepare for a Recession provides 3 important recommendations:

  1. Communicate often, to be able to avoid attention-grabbing articles that encourage fear. Instead, communicate openly, dispelling rumors about current market moves. Consider scheduling monthly emails providing clients with a brief overview of current occurrences with their portfolio.
  2. Focus on your existing clients, as opposed to consuming time to acquire new ones. Turn a client’s worry into hope for a better future.
  3. Empower your community, sharing your knowledge regularly through social media and other communication means. 

Regarding Tips for Coping with Stress, Reilly recommends three important routines to help eliminate and cope with stress:

  1. Establish a support system for yourself.
  2. Limit negative influences by establishing boundaries around negativity, putting your cell phone away at night, and beginning your day with gratefulness. 
  3. Design your day-to-day routine.

These recommendations align well with three of the obligations in our Code of Ethics:

  • To help maintain my clients’ confidences and protect their right to privacy.
  • To render timely and proper service to my clients and ultimately their beneficiaries.
  • To conduct all business dealings in a manner that would reflect favorably on NAIFA and my profession.

Building Relationships with Lawmakers

NAIFA Past Present John A. Davidson in this month’s InsuranceNewsNet Magazine discussed the role of building significant relationships for insurance and financial professionals. Building relationships with lawmakers to protect Main Street USA through political advocacy is equally important. NAIFA’s Annual Congressional Conference in Washington, D.C., occurs in May and provides an opportunity for financial professionals to advocate for clients, businesses, and industry. 

This recommendation aligns well with the 9th obligation of the NAIFA Code of Ethics:

  • To protect the financial interests of my clients, their financial products, and my profession, through political advocacy. 

These are just three of many examples available during the second quarter of 2022 of individuals and organizational groups abiding by the NAIFA Code of Ethics in their professional activities. For that, we are fortunate and appreciative.

Frank C. Bearden, Ph.D., MSM, CLU, ChFC, is a Managing Member at Frank C. Bearden LLC, author of "The Subtle Influence: Conflicts of Interest in Financial Planning," and a regular contributor to NAIFA's Advisor Today blog.



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