Issues in Ethics of Financial Services
CE 107
WELCOME TO CE 107
“Issues in Ethics of Financial Services”
Your role as moderator is crucial to the success of this class. In this document, we will attempt to do two things:
(1) Present a clear and detailed outline of how CE 107 should operate
(2) Anticipate and answer any questions or concerns you have in terms of your role as moderator and with the administration of the class in general.
WHY CHOOSE CE 107?
As of January 1, 2010, all Illinois licensed agents whose license is up for renewal are required to complete at least 3 hours of Ethics Continuing Education classes.
For more information regarding the new, Illinois CE rules:
http://www.insurance.illinois.gov/Producer/EdProvCEPreLicChanges.asp
The American College is passionate about helping our students expand their knowledge and opportunities as financial services professionals. The Center for Ethics in Financial Services promotes ethical behavior through program offerings that go beyond the “rules” of market conduct in an effort to help executives and producers be more sensitive to ethical issues and think more critically about ethical solutions.
CE 107 is an interactive three hour course designed for a live classroom setting. Students listen to insightful lectures, watch and comment on relevant and current ethical scenarios, and participate in a guided discussion. Julie Anne Ragatz, Assistant Professor of Ethics and Associate Director of the Center for Ethics in Financial Services, guides you through the course and provides you with a valuable learning experience backed by The American College. CE 107 meets the 3 hour Illinois state Ethics requirements.
BEFORE YOU BEGIN
CE 107 requires a minimum of 5 participants in a classroom setting. You should establish at least 5 participants before beginning the registration process. Each participant should fill out a “2011 Course Student Registration Form” and the Moderator should fill out the “CE107 Moderator Form”
Once you confirm your participants, select a date when you want the class to take place.
You must send in your registration form 10 days before the scheduled time of your class.
REGISTERING YOUR CLASS
In your course materials you will find the “Course Registration Form CE107 Issues the Ethics of Financial Services” form. Each student must complete this form and they all must be sent together 10 days before the scheduled class. Your completed registration form can be sent to:
The American College
Attn: Kaitlin Laret
2nd Floor
270 S. Bryn Mawr Ave
Bryn Mawr, PA 19010
Phone: (610) 526-1433
Fax: 610-526-1545
If you have any questions regarding the process, or you need to find your student ID # please call our Professional Education Department at 888-263-7265 or .
THE DAY OF YOUR CLASS
In your course materials you will find a Sign-In Sheet. When your students arrive for the course, it is important that each student ‘signs in’ on the Sign-In Sheet provided. Administrators from The American College will verify the sign-in sheet with the list of registered students. It is essential that students sign in to receive Continuing Education credit for this class.
If you have students that are not previously registered for the course, they must fill out a registration form for the course as well as signing in on the Sign-In Sheet.
If you have any questions regarding the process, or you need to find your student ID # please call our Professional Education Department at 888-263-7265 or .
MODERATOR’S GUIDE TO CE 107
Materials Needed
In order of use
· CE 107 DVD
· Sign-In Sheet
· Worksheet A: Ethical Sensitivity Exercise
· Discussion Guide #1: “What’s the Problem with Charlie?”
· Discussion Guide #2: “Jettisoning your ‘C and D’ clients”
· Discussion Guide #3: “Cheaper Rates”
· Discussion Guide #4: “The Whistleblower That Wasn’t”
· Discussion Guide #5: “The Busy Client”
· Worksheet B: “Hot Topics in Insurance”
o “Replacing an Annuity”
o “Using up the Disposable Income”
o “Handling a Concern about Potential Premium Increase”
o “Changing a Beneficiary”
o “Friend vs. Company”
MODERATING CE 107
Starting your DVD
If you have any trouble staring your CE 107 DVD please see our “DVD Troubleshooting” section in the Index of this handbook.
INTRODUCTORY SEGMENTS
Segment 1
Introduction (:52)
Click on the title “Introduction” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Segment 2
Compliance vs. Ethics (14:18)
Click on the title “Compliance vs. Ethics” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Segment 3
Testing Your Level of Ethical Sensitivity (3:07)
Materials Needed: Worksheet A: “Ethical Sensitivity Exercise”
Click on the title “Your Level of Ethical Sensitivity” and watch the segment. Once finished, the DVD will bring you to the next title screen.
DISTRIBUTE WORKSHEET A: “ETHICAL SENSITIVITY EXERCISE”
SCENARIOS
Scenario 1
What’s the Problem with Charlie? (1:41)
Materials Needed: Discussion Guide #1: “What’s The Problem with Charlie?”
Click on the title “What’s the Problem with Charlie?” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Using Discussion Guide #1 “What’s The Problem with Charlie?” moderate a discussion among the students using the questions provided.
Scenario 2
Jettisoning Your ‘C and D’ Clients (1:43)
Materials Needed: Discussion Guide #2 “Jettisoning Your ‘C and D’ Clients”
Click on the title “Jettisoning Your ‘C and D’ clients” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Using Discussion Guide #2 “Jettisoning Your ‘C and D’ Clients” moderate a discussion among the students using the questions provided.
Scenario 3
Cheaper Rates (1:11)
Materials Needed: Discussion Guide #3 “Cheaper Rates”
Click on the title “Cheaper Rates” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Using Discussion Guide #3 “Cheaper Rates” moderate a discussion among the students using the questions provided.
Scenario 4
The Whistleblower that Wasn’t (1:34)
Materials Needed: Discussion Guide #4 “The Whistleblower That Wasn’t”
Click on the title “The Whistleblower That Wasn’t” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Using Discussion Guide #4 “The Whistleblower That Wasn’t” moderate a discussion among the students using the questions provided.
Scenario 5
The Busy Client (1:48)
Materials Needed: Discussion Guide #5 “The Busy Client”
Click on the title “The Busy Client” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Using Discussion Guide #5 “The Busy Client” moderate a discussion among the students using the questions provided.
CONTINUING SEGMENTS
Segment 4
Making Ethical Decisions (15:40)
Click on the title “Making Ethical Decisions” and watch the segment. Once finished, the DVD will bring you to the next title screen.
Segment 5
When Good People Do Bad Things (15:04)
Click on the title “When Good People Do Bad Things” and watch the segment. Once finished, the DVD will bring you to the next title screen.
DISTRIBUTE ALL OF WORKSHEET B “HOT TOPICS IN INSURANCE”
DISCUSSION
Replacing an Annuity
Ask the students to read the Replacing an Annuity Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 1
“Replacing an Annuity” (3:47)
Click on the title “Replacing an Annuity” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
Using up the Disposable Income
Ask the students to read the Using up the Disposable Income Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 2
“Using up the Disposable Income” (8:48)
Click on the title “Using up the Disposable Income” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
Handling a Concern about a Potential Premium Increase
Ask the students to read the Handling a Concern about a Potential Premium Increase Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 3
“Handling a Concern about a Potential Premium Increase” (5:12)
Click on the title “Handling a Concern about a Potential Premium” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
Disturbing the Client for His Own Good
Ask the students to read the Disturbing the Client for His Own Good Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 4
“Disturbing the Client for His Own Good” (6:56)
Click on the title “Disturbing the Client for His Own Good” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
Changing a Beneficiary
Ask the students to read the Changing a Beneficiary Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 5
“Changing a Beneficiary” (7:44)
Click on the title “Changing a Beneficiary” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
Friend vs. Company
Ask the students to read the Friend vs. Company Case on Worksheet B. Have the students answer the corresponding questions on the worksheet in a small group or individually.
Discussion 6
“Friend vs. Company” (10:17)
Click on the title “Friend vs. Company” and watch the discussion. Once finished, the DVD will bring you to the next title screen.
CONCLUSION (2:22)
Click on the title “Conclusion” and watch the segment. Once finished, the DVD will bring you to back to the beginning of the DVD.
DISCUSSION GUIDES
Discussion Guide #1: “What’s the Problem with Charlie?”
Overview: This case typically generates interesting discussions and it is likely that you will encounter students who have faced similar issues in their own practice. The most obvious ethical issue at stake is the decision to violate the promise of client confidentiality in order to promote the perceived best interests of the client. Most students will express a serious to moderate level of ethical concern with the decision of the agent.
1.) What are the ethical issues involved in this situation? To whom do you owe ethical obligations and why?
While there are several ethical issues involved in this situation; three seem to be the most important:
· Violation of confidentiality
· Best interest of the client. What happens if you and your client disagree about what is in his or her best interest?
· Lack of diligence; i.e. why didn’t the agent talk to Charlie and his other clients) about this possibility before he took Charlie on as a client?
Take a moment to ask the participants to whom they believe they have an ethical obligation; some possible suggestions are:
· Charlie
· Charlie’s Children
· Yourself
· Your Profession (if so far as you are bound to act in accordance with a professional code of conduct or ethics)
2.) Does the fact that Charlie’s children are also your clients affect your assessment of the situation? Are you required to take the interests of his children into account to a greater extent than you would otherwise since they are your clients? Why or why not?
The fact that the agent has undertaken to work with both Charlie and his children led to a conflict of interest. You may want to lead the discussion to focus on two different points:
· What steps do you personally take to prevent against the emergence of conflicts of interest (you may also want to touch upon the point that part of acting professionally is acting diligently to prevent ethical problems from emerging)
· What does it mean to work in a client’s best interest? Obviously there are limits to what you can do to advance the interest of your client (for example, you cannot violate company policy or regulations) but beyond that, how vigorously do you need to defend and promote the interest of your client? Would Charlie’s children be able to accuse you of neglecting their interests and failing in your duty to them if you stay silent?
3.) What role, if any, does the obligation of confidentiality to your client play in your determination of an appropriate solution?
This question focuses on how agents prioritize their values and obligations. Obviously, every agent is going to acknowledge the ethical and pragmatic value of acting in a way that maintains client confidentiality. However, there are times when one value needs to be traded off to satisfy another value (in this case, perhaps, the value of looking after the best interest of your client). What value do your participants place on confidentiality? How does confidentiality serve to ensure the effective functioning of the financial services industry?
Discussion Guide #2: “Jettisoning Your ‘C and D’ Clients”
Overview: This case often generates a great deal of discussion. Some students find this issue to be of ‘no concern’ while others often believe this issues rises to a moderate or major level of concern.
(1) What are the ethical issues at stake in this case?
The principle ethical issue in this case is that the agent is breaking a promise he made to clients at the beginning of his career. The act of promise breaking always raises ethical questions since breaking our commitments violates the trust that people have in us and further undermines the cooperation on which society depends to create goods we all share and enjoy. Therefore, the decision to break a promise is an act that requires an ethical justification or defense. When is it morally permissible to break a promise?
Another ethical issue you could raise relates to the other side of the dilemma, which is that the overworked agent is failing in his legitimate obligations to (a) his other clients (b) his family and (c) himself as a result of the amount of resources he has dedicated to working with these clients. Often students mention the fact that the agent’s ‘A and B’clients are financially subsidizing the agent’s efforts on the ‘C and D’ clients.