THE COLUMNS
and address conflicts arising from personal interests. Professional financial-service
organizations regularly address these issues and their members are expected to carry
out such policies. While recommendations from friends and colleagues are helpful,
FINRA BrokerCheck (www.finra.org) is a free online service to help investors check
The opinions expressed in the columns are those of the authors
the professional background of current and former registered securities firms and
and do not necessarily reflect the editorial viewpoint of the
brokers. It should be the first resource to check when choosing whether to do busi-
Publishers of the North Shoreian Magazine.
ness with a broker or brokerage firm.
Some attempts at moral guidance have ironically come from Washington. The
I On Money With Mark
Securities and Exchange Commission’s (www.sec.gov) Investment Advisors Code
of Ethics, requires Registered Investment Advisers to adopt a code of ethics as an
Financial

Advice and Commentary
amendment to the Investment Advisers Act of 1940. Among other things it urges
advisers to “take great care in preparing their code of ethics, which should be more
by Mark Snyder, ChFC than a compliance manual.” A code of ethics should set out ideals for ethical conduct
premised on fundamental principles of openness, integrity, honesty and trust. A good
code of ethics should effectively convey to clients the value a firm places on ethical
Making the Case for
conduct.
Nearly each of the professional designations offered by the educational institu-
Business Ethics
tions that serve the securities industry such as the College for Financial Planning
Business ethics is something each of us should adhere to. While this sounds ob-
(www.fp.edu), The American College (http://www.amercoll.edu) and the American
vious unfortunately it’s not always that clear. It often seems that each time we watch
Academy of Financial Management (www.financialcertified.com) has an ethics com-
the news another scandal has rocked Wall St., Washington or Albany.
ponent. The American College initiated the first endowed chair devoted to business
In our office, we regularly conduct due diligence and choose only legitimate
ethics studies, the Charles Lamont Post Chair in Ethics.
products before we invest any of our clients’ monies. Plus industry self-regulation
B ut do we really need formal ethics and conduct requirements? Shouldn’t ethical
will continue to root out the few bad apples for the benefit of those investors who are
behavior be a part of our daily practice no matter which profession we choose?
in the market for the long-term.
While there’s no magic formula for incorporating ethical conduct in business
Just as our economy was recovering from the post-Enron world, it had a relapse
neither is there any excuse for not doing so.
thanks to a string of Wall St. real estate and banking failures and scandals. This begs
one to ask: is there a ROI (Return on Integrity) with an organization that emphasizes
Mark J. Snyder, ChFC, is an independent financial adviser in Medford. For a free,
fair business principles. Can a business successfully operate on principles of fair-
no-obligation copy of his newsletter, The Snyder Report, please call: 631-289-4224.
ness? Will doing the right thing for one’s clients actually help the business succeed?
While ethics are not a glamorous part of business we’re fortunate to have a
financial-services industry that for the most part, exercises good ethical judgment on
a daily basis. We’d rather hear stories of business people climbing back from ruin
A View Askew
and regaining corporate stature or news of mergers and acquisitions than of someone
Wit and a Little Wisdom
methodically trying to do the right thing each day simply because it’s the right thing
to do.
By Joe Neuschatz
Our business is customer-service driven. This is done by developing close, trust-
worthy client relationships and then selecting prudent and conservative products and
services to help clients meet their long-term goals. Such practices help us keep our
client relationships flourishing for the long haul – in good markets and bad. Operat-
Two Mixed Methinks
ing on principals and doing the right thing by one’s clients should be the only focus
1) A Sick Mind in a Healthy Body.
of any business because at the end of the day, this business is entirely about ethics.
You have in front of you, The North Shoreian’s Health Fitness & Beauty issue.
While many in our industry have rightly been taken to task for misconduct, take
This is the perfect occasion for this writer to come clean and confess. To finally
solace in the fact that most of us have probably helped a great deal of people in more
open up about some of his “staying in shape” pet peeves. The ideal juncture to let the
ways than we can remember -- this is also a trend that will continue. Some business-
world know that from the moment he became contaminated with the stupid “health
es actually make ethics a cornerstone in their marketing by outwardly positioning
and fitness obsession” virus, his life of pleasure stopped. Instead of doing what he
themselves as forthright and trustworthy in each of their business communications.
feels like doing, instead of just enjoying his daily existence, this man now feels com-
Others may offer a corporate social-responsibility report.
pelled to plan everything. To do only what the wellbeing gurus on the Today Show,
But the subject of business ethics is more topical today than at nearly any other
say it is OK to do. But first….let me change my third person narration, to the first:
time in this industry. Many are regularly asking: is there a relationship between eth-
The croissants with eggs and bacon are gone. Gone from my life. Absent from
ics and business success or is “business ethics” a contradiction in terms? Should we
my breakfast plate and I miss them. Those French delicacies were so yummy! They
consider an official ethics policy or is our awareness to “do the right thing” for each
were replaced by a “healthy” all-American “All Bran” eating habit. The cereals gob-
other adequate? Can I trust the person/company who’s minding my money?
bling routine started the day I learned that fiber is best for the colon and, since Janu-
Tackling business ethics is an area too wide to be sufficiently addressed here. A
ary of 2007, I wash my food down with sugarless black coffee, to avoid Parkinson’s
simple web search will produce endless “experts” on the topic. Similarly, contempla-
disease. I don’t plan to bore you here with the list of all the vitamins (with Lutein to
tion of the numerous issues each of us confronts puts us face-to-face with choices
protect the eyes, of course) I am taking, but I do have to acknowledge that I follow
that have ethical implications on a daily basis. When considering your financial
religiously the Health pages of The New York Times, hoping desperately to discover
adviser, make note of the following:
that the recent “daily sex protects the prostate” claims are totally exaggerated.
 Is he fee or commission based?
When my favorite supermarket tabloid brought up the notion that a brisk morn-
 Are the statements and fee structure clear?
ing walk is the best way to keep your body in shape, I started walking. I wanted
 Does an independent “custodian” prepare the statements?
to conform to the old Latin saying: Mens Sana in Corpore Sano: a sane mind in a
 Is he encouraging products and services which you do not fully understand?
healthy body.
 Is his marketing completely truthful?
How wrong I was!
 Does he disparage competitors? Regulating agencies? The government?
My first walks took place on the residential streets around our local golf course.
 Does he belong to any professional organizations or have any special industry
To keep my mind entertained during the boring 40 minutes workout, I started look-
designations?
ing for misplaced golf balls. To my delight, I found plenty. To my dismay, I also
 Does a staff member answer the telephone whenever you call?
discovered empty beer bottles, soda cans and fast-food wrappers. I was boggled.
Answers to these questions may be good signals as to whether or not the finan-
Who dares polluting our residential environment? My neighbors? Their visitors?
cial adviser you’re considering is serious about workplace ethics. Some of the “hard
I decided to discuss the issue with the “Neighborhood Watch.” Its street signs
facts” that can help you decide which financial adviser to choose can be obtained
are present, its members absent. Possibly non-existent. I suddenly discovered that we
from a look at the statements he sends to clients. While no adviser will show you a
live in a world of ignored or misleading street signs, surrounded by dumped garbage.
current client’s statement, you can ask to see a sample. Be sure your adviser uses an
During my physically healthy walk I was able to make a long list of disregarded
“independent custodian” when preparing statements. This is an objective third-party
speed limits signs and I kept busy counting the laughed-at red octagonal STOP mark-
that provides a layer of transparency to the transactions and services, acting as a se-
ers. How depressing!
curity guard for you. Similarly, can you easily understand the statement? Is balance,
The stronger my body became, the longer I walked. The longer I walked, the
deposit and withdrawal information clear?
more depressed I became. My extended marches took me to streets on which ugly
Ethics codes are expected to set forth conduct standards expected of finan-
(and totally illegal) home-made posters are attached to poles and trees: “Gutter
cial-advisory personnel, safeguard nonpublic information of client transactions
Cleaning,” “Snow Plowing,” “Garage Sale” etc. Where are our lawmakers when you

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