Ethics is your strength – here’s how to keep it sharp

Ethics has always been at the heart of quality risk advice, and there is no doubt that advisers recognise the importance of embedding it into their practice.

A 2024 study by the Financial Advice Association Australia (FAAA) revealed that 94 per cent of clients who have received financial advice trust their adviser to act in their best interests. That trust isn’t just earned at the first meeting – it’s reinforced through every recommendation, claim and conversation.

We have long seen this reflected in the way advisers show up for clients – not just delivering advice, but going above and beyond, especially when it comes to claims time. While regulation sets the floor, many advisers hold themselves to a much higher standard. They apply not just compliance, but character and transparency – blending pathos, logos and ethos, otherwise known as emotion, logic and credibility – as the foundation for lasting trust.

The following hypothetical case studies illustrate how these principles play out in practice, where going the extra mile isn’t merely about compliance but a commitment to delivering the best outcomes for clients.

1. Going beyond the brief with comprehensive and tailored advice

Great advisers don’t just respond to a client’s request, they consider the full picture that includes a client’s needs, risks and goals. This means going beyond the brief – conducting a thorough needs analysis, recommending full and appropriate coverage, and educating the client on any potential gaps. In doing so, advisers can more effectively provide coverage that is tailored to current needs as well as long-term outcomes.

Clients don’t always know what they need – that’s why they turn to you. But when a client asks for something specific, like income protection, and nothing else, an adviser faces an ethical dilemma: do you deliver what they’ve requested, or guide them into territory they haven’t considered – even at the risk of making the process harder?

A transactional approach may meet immediate needs, but when advisers dig deeper – considering family structure, liabilities and future goals – they often uncover under-insurance in areas like total and permanent disability (TPD) or trauma cover.

The takeaway?

Ethical advice isn’t just about delivering what’s asked. It’s about guiding clients toward what’s genuinely in their best interests – the protection they didn’t know they needed, until they did.

2. The role of real client advocacy

Comprehensive advice sets the stage, but advocacy is where an adviser’s ethical leadership is truly tested – especially at claims time.

Advocacy is more than just setting up the right coverage, it’s standing by clients when they need it most: helping them navigate insurers, access claims services and ensuring they feel supported at every step.

In a situation where a client’s TPD claim is denied, an adviser’s professionalism and commitment are put to the test: what is the best way to respond and ensure the client is aware of their options?

In this moment, the adviser’s role extends beyond the transactional. While it’s important to always be realistic about claim conditions, great advisers also continue to advocate for clients, especially in what is often a vulnerable moment for them. The numbers show how much this matters: 58 per cent of Australians with a financial adviser are likely to trust the financial services industry, compared to just 39 per cent of those without one.

The takeaway?

Client advocacy means standing firm when it counts. It’s not about overpromising – it’s about showing up. And in doing so, advisers don’t just support individuals, they lift trust across the entire profession.

3. Honesty and integrity in the grey areas

The true weight of an adviser’s ethical responsibility is often felt when faced with difficult choices, moments that call for not just professional judgement, but moral clarity.

Maintaining honesty and integrity isn’t just important, it’s essential to earning client trust and upholding the reputation of the advice profession. Beyond just following rules, integrity is about doing what is right, even when it’s difficult.

Here’s the ethical tightrope no one talks about at conferences. You discover a long-standing client is working full time while receiving income protection benefits. They’re grateful for your help. They trust you. You’ve built rapport over years.

In this moment, the adviser faces a difficult decision: stay silent and protect the client relationship, or take an ethical stance and address the fraudulent claim?

Fraud doesn’t just hurt insurers – it drives up premiums and damages the integrity of the advice profession. Advisers have an ethical responsibility to act in the best interests of both their clients and the wider industry. While confronting the issue may be uncomfortable, it’s essential for preserving the integrity of the profession and safeguarding the system that benefits all clients.

The takeaway?

Honesty and integrity are non-negotiable in risk advice. Doing the right thing isn’t always easy, but it’s what sets the best advisers apart – ensuring fairness and sustainability across the financial system.

Being ethical means more than following rules – it means being willing to be uncomfortable. Good intentions aren’t enough. Today’s advisers must balance emotional empathy (pathos), logical decision making (logos), and credibility (ethos) to deliver advice that stands the test of time.

When advisers lead with all three principles, they create a foundation of trust that benefits not just the client, but the entire industry. Every step taken to advocate for clients, act with integrity and make informed decisions raises the bar – for individuals, for the profession and for the next generation of advisers.

Keep leading by example. The impact is real – and it lasts.

Mark Neil on behalf of PPS Mutual; consultant at Life Risk Strategies & Coaching.