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Ethics: Financial Planners and Medical Professionals

Warren Ingram CFP South AfricaBy Warren Ingram, CFP

JOHANNESBURG, SOUTH AFRICA: The recent conviction of Dr. Conrad Murray for his role in Michael Jackson’s death can teach financial planners many lessons about the dangers of giving clients what they want rather than what they need. I cannot help but think that a professional advisor who focused on his client’s best interests could have prevented this unnecessary death. Ultimately, all professionals need to be sure that they place their integrity and ethics above all other considerations as that is the implicit promise we make to people who trust us with their well-being.


Many financial planners are reluctant to give the correct advice if it might upset their clients. As a result, they often temper their best advice because they are worried that they might lose their clients if they tell them the whole truth. This typically happens when clients are using money to compensate for emotional or behavioural issues. Whilst it is not the financial planner’s role to counsel clients about their behavioural issues, it is certainly our role to show them the impact on their financial position of their choices around money.

I have a widow who became a client in 2005, shortly after her husband passed and I quickly realised that she was spending a disproportionate amount of money on “retail therapy” – she went shopping five or six times per day to combat her depression. For the first few months, I asked her to track her expenses and to categorise them in the hope that she would see how much money she was wasting. When this did not work, I eventually called a meeting with her and her two adult sons to explain the financial danger that their mother was facing and the consequences to them if this situation was not remedied. My client was deeply ashamed of her uncontrolled spending and was quite angry with me for a few months after our meeting because I had alerted her sons to the problem. Fortunately, the two sons took their mother for counselling for her depression. Over a period of two years, her spending gradually declined to sustainable levels and she is now in a healthy financial and emotional position. I am glad to say that she has remained my client and still sends me birthday cards every year. I would hate to think of her emotional and financial state if we had just let her continue spending to keep her happy…


Health professionals and financial planners are concerned with people’s behaviour and in particular how their destructive behaviours can be managed. Financial planners are becoming increasingly proficient at tempering their client’s worst emotional impulses during stock market crashes to enable them to become better investors. We cannot change our clients’ destructive behaviours with one meeting or email. We can only effect change through a relationship of trust that is built over a period of time. It is likely that a doctor who focused on keeping clients healthy through proper diet and exercise with regular monitoring would have more success than someone who only sees patients once they are sick and then prescribes a few pills to manage the current symptoms.

Any profession that is built on a relationship of trust that requires people to modify their destructive behaviour cannot be based on a transactional relationship. People need regular monitoring and encouragement to stick to their goals. That is why the top tennis players and golfers all have coaches, they don’t need much technical input but they do need regular monitoring and encouragement from people they trust, especially when they need to hear bad news.

If Michael Jackson’s doctor had taken the time to alert the Jackson family that there were major behavioural issues that were likely to be harmful to Jackson’s life, he might have been able to prevent the tragedy. There is also a real chance that he would have been fired but professionals cannot be concerned about losing a client if they are doing what is best for that client. By doing the right thing consistently over time you will build deep relationships of trust with the right clients who will stay with you for decades.

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