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By Barbara O’Neill, Ph.D., CFP®, AFC® [email protected]

One hallmark of a professional credential, such as the AFCPE Accredited Financial Counselor® (AFC®) designation, is a code of ethics. Ethics are principles of proper conduct derived from morals (i.e., principles about what is right and wrong). Ethics are intimately grounded in the work that Personal Financial Managers (PFMs) do with clients. In addition, many financial credentials such as AFC® and Certified Financial Planner (CFP®) have practice standards to ensure that professional practice is congruent with ethical standards.

Military standards of ethical conduct are very detailed and were discussed in a OneOp (MFLN) webinar in 2017. We also sponsored another ethics webinar in 2016. In 2018, empathy and ethics were discussed in our 2-hour ethics webinar. Ethical values incorporated in military ethics include truthfulness, straightforwardness, integrity, loyalty, accountability, fairness, caring, respect, promise-keeping, responsible citizenship, and pursuit of excellence. AFCPE has 51 standards of practice that describe what AFC credentialed professionals can or cannot do in specified situations.

“Behavioral ethics” is a field of social science research that studies how people behave when faced with ethical dilemmas, and this was the focus of our 2017 ethics webinar. Studies indicate that a desire to maintain a positive, ethical image can lead people to behave in a more ethical manner. However, overconfidence in having strong ethics can lead people to not adequately consider the ethical dimensions of a decision. In other words, they have a blind spot. Studies have also found that people behave more ethically while being observed and less so under conditions of perceived anonymity.


Below are seven key points about ethics and practice standards related to financial education and counseling, many of which come from the AFCPE standards:

1. Culture is Key

Develop an organizational culture with a strong commitment to ethics and oversight of decisions and behavior. Hold periodic training focused on real-world ethical dilemmas. Organizations that do not regularly focus on ethical concerns leave their members vulnerable to behaving unethically.

2. Recognize Your Limitations

Refer clients to other professionals when their questions or the services that they require are beyond the scope of your knowledge, expertise, and professional practice. Never try to “wing it” with the chance of making an error.

3. Education is Ongoing

Grow your expertise by keeping abreast of tax laws and government (e.g., Social Security) and industry developments and by striving to improve your professional competency through continuing education credits (e.g., 30 CEUs every reporting period for AFC® and CFP® certificants).

4. Follow Employer Rules

Maintain high standards of conduct according to the objectives and policies of the for-profit company or non-profit or government agency that you are affiliated with.

5. Respect Client Privacy

Maintain confidentiality in the client/counselor relationship in all matters pertaining to professional practice. Client information of any kind should be revealed to others only with the expressed, informed consent of the client. As a work-around, encourage clients, themselves, to share important information discussed at counseling sessions with their family members.

6. Create a Plan

Anticipate potential ethical challenges in advance and brainstorm solutions with colleagues. For example, create a list of “dangerous client” activities and procedures to respond. An ethical response plan is similar to a school’s active shooter plan. You hope you never need to use it, but it is there just in case.

7. Do Not Accept Referral Fees

Walk away from any arrangement with any entity, even a non-profit organization, that would pay you a referral fee for directing clients to them. This is true even if the referral is in the client’s best interest. It is never okay to receive referral fees. Period.

For additional information about ethics and financial education and counseling practice, review the free ethics webinar for AFCPE certified professionals and RSVP for our Jan. 26 webinar, Ethical Considerations During Challenging Times.


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