The lightning pace at which NBC News anchor Brian Williams lost credibility with the public is a cogent reminder to advisers that even a tiny fib can breach trust or confidence. Advisers should avoid telling clients even so-called white lies, because trust is nearly impossible to regain once broken, experts said.
“Trust is the commodity with which we work,” said Dan Candura, a financial adviser who teaches ethics seminars to other advisers. “It's what people are looking for most in a financial adviser.”
While parents and other family members can often forgive dishonesty, it's a different story with a client, Mr. Candura said.
The deception just “hangs there,” he said.
Advisers should steer clear of telling even an innocuous lie, such as, “Sorry, I'm busy with a client right now,” when they are actually enjoying their morning coffee and crossword puzzle, said Mr. Candura, founder of Candura Group.
They should have an open and honest relationship with clients, and be comfortable telling them it's not a good time while scheduling another time to talk, he added.
“Little white lies don't accomplish anything,” Mr. Candura said. “When people start exaggerating and padding, and trying to inflate themselves, it destroys that credibility, presenting a face to the world that isn't true.”
By exaggerating his role in a trip to Iraq in 2003, the trust that Mr. Williams had built up over years of reporting and delivering the news unraveled. Steve Burke, chief executive of NBC Universal, called the anchor's actions "inexcusable" and placed him on six-month leave without pay. NBC is investigating the matter.
"By his actions, Brian has jeopardized the trust millions of Americans place in NBC News," Mr. Burke wrote to employees.
Justin Paperny, a former broker who served a year in jail for violating securities laws and now is a consultant for white-collar criminals, said the financial advisers he knows with thriving businesses have irreproachable ethics.
“The most successful people and advisers embrace the mantra that if you respect someone enough, you tell them the truth,” Mr. Paperny said.
Advisers are most likely to tell “white lies” when they are soliciting business, making promises about their responsiveness and the frequency of meetings, he said.
Another situation ripe for a misrepresentation: Advisers' dealing with smaller clients they may have “outgrown,” according to Mr. Paperny. They may think they're being polite by fibbing to get off the phone and take a call from a client with more assets, he said.
Jack Singer, a psychologist who works with financial planners, warned that white lies are a slippery slope.
Trust, which is "a fragile thing," is critical to maintaining clients, who have invested their family's wealth with an adviser, Mr. Singer said.
"Once someone knows that a person is deceitful, they will assume he or she has been deceitful multiple times that they don't know about," he said. "There will always be that doubt."