Are ethics in business an anachronism

[Noporscheform]

When growing up my parents were excellent role models. Always stressing the importance of honesty and ethics and as my father always said " being able to sleep at nite without worry". I like to think that these values are the same ones that I have followed in both business and personal activities. I like to believe that my sons learned these same lessons.

Maybe I should teach them something else. In today's world is it all about " getting the better" of every counter party. Winning at all costs?

I can recount many times when people tried to exploit the weakness of a fellow employee for personal advantage - generally called "playing office politics". I can recall times catching people lying, including the CEO of the last company I worked for, who would lie to anyone if he thought it was in his personal best interest.

I have met people who will lie about anything, generally good sales people have this skill, and use it very successfully.

I changed careers at 47 and entered the world of personal finance and investments. I was shocked at the way an entire industry accepts lying as acceptable, and the consequences of getting caught are generally insignificant. The amount of regulation that exists is constantly trying to make the participants ethical. But they find new ways to pull the wool over clients eyes in order to separate them from their money.

So what values do you want your children to learn, ethics and honesty or do whatever it takes to be successful?

[Iciclehead]

Amen brother. Couple the lack of ethics with the "its all about me" attitude you have the reason why I am exiting the workforce at age 57.

Dennis

[matt f]

A great transaction used to be when both parties felt they got a good deal.
A great transaction today is when both parties feel they screwed the other.
To some the result may be equivalent, but to me the process today stinks.

[Zeke]

Well, for what it's worth, the verb is spelled "lie" not lye. But one can be just as caustic as the other.

No, I can't relate to today's ethics and anyone who has read my posts probably knows how bitter I have become. But I can't say that I got any significant training from my parents. I'm sure the proper environment is important, but I think people are inherently honest.

So, what is really wrong? Well, it's as you say, you better watch your back these days. Good people are doing bad and they are getting rewarded for that.

In a nutshell.

[Baz]

I agree our society and culture has taken a turn for the worse.

As Dennis said - it's all about me is one of the big reasons why.

I'm proud that I have customers who would hug me when they see me (or shake my hand) and give me referrals all the time because I have cultivated the concept of collaboration rather than competition in our client relationships.

I credit my parents for raising me properly - amen.

[Kistle]

Somewhat tangential to your primary point...can you give some examples of where personal finance/investment planners use tactics to separate clients from their money? I generally subscribe to the cliche that "financial planner"...that's french for "thief" mentality.

Many of my friends use these services, so I would be interested in hearing ways that you have seen utilized in that business that are bordering unethical.

Thanks,

JA

[BE911SC]

Oliver Stone maintains to this day that he is "shocked" that so many Wall Street bankers have complimented him over the years for the creation of the "Gordon Gekko" character in 1987's "Wall Street." Gekko is not the villain, he's the hero to crooked bankers. To real Wall-Streeters Charlie Sheen's "Bud Fox" character is not the moral hero of the movie, he's the dummy who had a conscience he couldn't ignore.

[widgeon13]

ethics in business is an oxymoron.

[Groesbeck Hurricane]

Ethics depends upon the people involved. Some parts of this country are worse than others!

[rusnak]

ethics in business is absolutely, 100% crucial, 100% of the time. There is no other way.

[Noporscheform]

The primary issue in personal finance is the generation of a commission. "advisors" will use a financial plan to sell a product - life insurance (hi commission vul) annuities (generally 4-5% commission) Long term care etc. The pressure to sell product, regardless of whether it is a good fit for the client is immense from the likes of Ameriprise type advisors. I once saw a friend who was sold three annuities with the same money over 6 years. The advisor generated over $70,000 in commissions off the same money, the client did not understand the reasons forthe changes - he trusted the advisor.

I came into this industry with 20 years of corporate planning, accounting, taxation and finance experince. I expected that I was going to use theses skills to help individuals address these same problems. I found an industry only focused on selling product, not solving problems.

I quickly moved on to my own practice, I use tax, legal and insurance advisors to address issues appropriately, and then use low cost indexes to develop tax effecient low cost investment portfolios. My business partner and I do not sell any commissioned products, use low cost brokerage houses such as TD ameritrade, who have no in house products and we clearly set out all fees each quarter.

Balance sheet design, cost management and appropriate investment design are key to a solid financial plan.

[Christien]

I used to be a partner in a retail used car dealership, and as such did everything from cleaning floors to selling cars to buying inventory to marketing. I learned quickly that you can't sell cars by being completely honest. Not that you have to lie, but you have to conceal certain things and frame others a certain way. There are 2 reasons for this: 1. the other guy down the street is doing it, and the customer (for whatever reason) usually believes what they want to hear, regardless of reality, meaning that everything being equal between 2 cars, the customer will go with the one he's told is the better car, 90% of the time, and 2. the vast majority of used car buyers are unrealistic - they want a brand new car at used car prices.

I saw both as huge problems within the industry, but #1 propagates #2. I was lousy at sales, because I can't be dishonest with people. I learned that honesty doesn't go very far in used cars.

[Noporscheform]

I kept telling myself that I had spelled "lye" wrong but spell check said I was ok.

[widebody911]

Originally Posted by Noporscheform

I kept telling myself that I had spelled "lye" wrong but spell check said I was ok.

The more you know: homonym

[onewhippedpuppy]

Originally Posted by Christien

I used to be a partner in a retail used car dealership, and as such did everything from cleaning floors to selling cars to buying inventory to marketing. I learned quickly that you can't sell cars by being completely honest. Not that you have to lie, but you have to conceal certain things and frame others a certain way. There are 2 reasons for this: 1. the other guy down the street is doing it, and the customer (for whatever reason) usually believes what they want to hear, regardless of reality, meaning that everything being equal between 2 cars, the customer will go with the one he's told is the better car, 90% of the time, and 2. the vast majority of used car buyers are unrealistic - they want a brand new car at used car prices.

I saw both as huge problems within the industry, but #1 propagates #2. I was lousy at sales, because I can't be dishonest with people. I learned that honesty doesn't go very far in used cars.

Not true, you make your money when you buy them. I periodically buy cars that need a little TLC, fix them up right, drive them for a bit, then sell them. I'll probably have $4k invested in my '88 911 before I'm happy with it and therefore ready to sell, and it will be a top notch car. I don't cut corners, I keep excellent records, I write detailed and honest advertisements, and I take a ton of high-res photos. I've sold multiple cars sight unseen, several to Pelicans, who always report that the car is nicer than expected. But I'm also not selling a Camry, therefore not competing with every sleazy used car dealer in town.

[Christien]

Selling cars privately, especially Porsches, is a completely different world than selling used sedans, compacts and minivans at an independent dealership.

[Noporscheform]

I have a friend who runs a small independant used car lot. One of the most honest people I have done business with. He wholesales cars with stories, does a lot of repeat business as he tries to not misrepresent his inventory. It is a tough business to make money in.

[onewhippedpuppy]

Originally Posted by Christien

Selling cars privately, especially Porsches, is a completely different world than selling used sedans, compacts and minivans at an independent dealership.

True, but mostly because it is a niche market. This is a hobby for me, but I'm relatively confident that I could make an ok living running my own small and focused dealership. It's also a different business model, there's none of the nonsense of dealing with auction cars with razor thin margins that are dime a dozen. Why do what everyone else does? Part of being successful in business is setting yourself apart from the competition.

[look 171]

There are still good and honest people out there. I know this for a fact. I hand pick many of my clients and they do the same when they pick their contractors. they usually know a lot about us before we even meet up for a meeting. No short cuts and build a better mouse trap when necessary. People complain about how ethics, service, and doing thing they was they are suppose to be done is in history in America. No it isn't true, we just have to fine them. We just have to weed out the snakes.

[Baz]

No such thing as competition - just others.....if you are doing it right.

And if you're not having fun......you're doing it wrong!