Preston Manning to advisors: No substitute for integrity

Speaking at the IAFP 2010 Symposium in Banff, Alberta, Manning drew parallels between politicians and financial planners, pointing out that planners should set their sights higher in terms of ethics.

“If the aim is corruption-free government, business, or professional advice, there is still no substitute for character, personal integrity and adherence to strong ethics,” Manning told the audience.

During a campaign, a politician may be best served telling the electorate what they want to hear, he explained, but once in government, honesty is required.

“A long-run relationship is better served if you tell people what they need to hear,” Manning said. “If that injures the relationship in the short-term, or even terminates it, in the long-run its better to tell people what you think.”

In an adversarial setting, such as a court room or the floor of the House of Commons, there is more latitude for defining “the truth,” he pointed out, as each side in the proceedings needs only to tell one side of the story.

Financial planning should not be an adversarial process, but a cooperative effort, with the advisor sharing a common interest with the client in achieving the latter’s goals.

“What’s the ethical test to which a communication should be subject? There’s really only one, and it can be summarized in three words: Is it true?” he said.

One of the greatest threats to ethics today is moral relativism, he says, a doctrine which provides the individual with no clear absolutes in terms of right and wrong.

“In the political arena, as the country gets more and more diverse, its getting harder and harder to get consensus on any absolute ethical standard,” he said. “There are no absolute standards, its all relative.”

This system of thought has many justifiable applications – most people would agree that killing is wrong, but few would argue against killing the enemy in a just war.

But this is quite far removed from financial services, and Manning praised the industry for having a fairly advanced set of absolute principles, pointing to the rules that govern accounting, for example. While some might scoff at such an idea, it should be remembered that those caught abusing accounting principles usually face stiff punishment.

While it is easy to advocate for a movement toward increased moral absolutism, many would find it difficult to offer a basis for such a system of thought, given the diversity of Canadian society.

Manning doesn’t.

As the son of a radio evangelist, he invokes the ethical lessons of the Judeo-Christian tradition, in particular, The Golden Rule – do unto others as you would have them do unto you – and the Old Testament call to “love thy neighbour as thyself”.

“You’ll find similar statements and standards in the traditions of other faith communities and the humanist tradition,” he says. “I think [its] especially relevant to financial planners in a capitalist system, because there is a peculiar practical aspect that doesn’t call for you to abandon your self-interest, but rather to use your own self interest as a guide to recognizing and serving the interests of others.”

In the Q&A session that followed his speech, Manning said the public debts that boomers are accumulating and passing on to their children and grandchildren were alarmingly unethical.

“It’s like your parents got a hold of your credit card,” he said, raising chuckles from the audience.

And while it is a Conservative initiative, he is not enthusiastic about the prospects of a single national securities regulator, questioning the constitutional authority of the federal government to lead such a project.

“I would support the idea of a national regulator, if I could be assured that it would be sensitive to the different economic requirements and interests of the different regions. I am not assured that would be the case,” he said. “I think the national regulator would tend to be overly dominated by the Ontario Securities Commission…and therefore I would have reservations about the national regulator. I would rather put the effort into making the passport system [work].”