NBC Dateline’s “Tricks of the Trade” Program Creates Opportunity for Ethically Committed Financial Professionals.

Although highly controversial, NBC broadcast highlights the need for greater transpareny in financial sales pratices, says industry ethics group.

*** Please note: NEB released the following statement to the industry on
Thursday, April 17, 2008 ***

In the aftermath of Dateline NBC’s exposé on annuity sales practices, financial professionals have an opportunity to reaffirm their commitment to ethical business practices and to implement those practices with their clients, according to the National Ethics Bureau (NEB).

While many believe that Dateline NBC’s report was journalistically flawed, millions of Americans may take its claims at face value. As a result, NEB, a membership organization of background-checked financial professionals, encourages advisors to consider the program’s underlying lessons and recommit to serving the public with high levels of integrity, especially in the areas of suitability and disclosure.

Specifically, NEB issued the following reminders to all financial professionals:

• First, don’t just give lip service to full disclosure. Always fully explain interest rates; if, when, and how they might change; and all fees consumers must pay in connection with their financial product.
  
  
• Second, don’t misrepresent any fact in an effort to persuade consumers to buy a financial product or service. For example, do not suggest that the FDIC, which insures bank deposits, is insolvent.
  
  
• Third, don’t rely on fear as a sales tactic. Rather, provide objective information that helps clients to clarify their goals and to address their actual financial needs and concerns.
  
  
• Fourth, don’t use dubious or unaccredited industry designations. Instead, make sure a designation adds legitimate value to your business and to your clients.
  
  
• Fifth, don’t claim that you’ve written an article or book that you haven’t actually written or personally collaborated on. It’s acceptable to use third-party content to support your marketing effort as long as it is identified as such.

To learn more about these and other ethical business practices, NEB encourages financial professionals to subscribe to Ethics Edge, its free monthly e-newsletter. Ethics Edge includes compliance guidance (Red Flag Reminder) and ethics motivational content (Eye on Ethics), as well as profiles of NEB members who are doing business with integrity.

Those who wish to communicate their ethical commitment publicly should consider joining the National Ethics Bureau. To qualify for membership, financial professionals must pass a series of background checks and agree to maintain the professional standards embodied in NEB’s Ethics Pledge and Member Agreement.