Reply #1 and #2: Post provides specific, constructive, and supportive feedback.
Reply #1: One dilemma presented in the article relates to confidential information. A financial planner must keep the information confidential unless the client gives permission. It can be difficult to determine what information is considered confidential. There are situations that could arise concerning an individual’s decision-making capacity. Intermittent capacity occurs when individuals have periods that they can’t make decisions. These periods could occur after a death or divorce. A financial planner may want to contact a family member or doctor when there are potential problems.
Situations like these can create challenges in determining what is ethical. The financial planner’s practical Code of Ethics and Professional Responsibility clarifies similar situations. Principle 5 states that information should not be revealed without the consent of a client. There are expectations that include situations such as legal proceedings. There are various rules that relate to confidentiality as well.
Financial planners rely on additional things to resolve ethical issues. There are many protocols that must be followed. Financial planners make decisions based on what is legal. They must determine what they must do even though there may be times they ought to do something. Although a financial planner wants to call a family member, it is illegal to do so if their client doesn’t provide consent. Financial planners take many steps to protect their clients and themselves.
I encountered various personal experiences relating to confidential information when I worked at a bank. There were many instances when individuals tried to access information about their spouse or family members. I couldn’t provide them with any information if they weren’t on the accounts. The account holder had to provide permission to allow specific people to access financial and personal information. This was a difficult concept for many people to understand. There were numerous protocols that had to be followed to protect customers.
Reply #2: When analyzing the different dilemmas that are presented when being a financial planner, there are many things that can keep you from getting yourself stuck between a rock and a hard place. One of the ways that stuck out to me in order to prevent a misunderstanding from happening is keep the proper documentation. “You must consistently document every client transaction and their personal information” (Addington).
Keeping adequate documentation of meetings and client interaction checks off multiple principles in the code of ethics and professional responsibility. Competence, professionalism, fairness, and diligence are the big four that come to mind. When looking at each of these areas, it can relate to doing to holding yourself to specific standards during conversations and to challenge your knowledge and attitude when providing suggestions to clients.
Looking more in-depth, keeping a quick documentation can also provide a second look feedback for yourself to ensure the proper suggestions have been made. When taking the extra five minutes to note the clients current situations, the recommendations made, and out come you can take a step back an analyze the conversation. This enables you to check of the competence box by looking at your knowledge, professionalism by the way the conversation was held, the diligence by your analyzation of the client, and fairness by looking for conflicts of interest and making sure the clients needs are put first.
Technically being a financial advisor, or more specifically an insurance agent, I run into these situations often as I have just begun this journey. My most common dilemma happens when a customer calls in to make a change, or vice versa as I offer my two-cents on their situation. If there are no documents on the dates, or what was told during the conversation it is very hard to prove, or to remind the client what happened. My new philosophy is to take the extra few minutes to make a note of the conversation as it not only saves the date and time, but it also allows me to recall each conversation to enlighten the customer what we had talked about. This allows me to become much more professional, organized, and show my competence in the certain area
Reply #3 #4 #5 and #6: Response is substantive, insightful, provokes further thought. responses should be researched and must include a citation using APA format.
Reply #3: The financial crisis made the housing bubble worse, That created worthless investments when the bubble broke. Financial institutions purchased the mortgages and put them into bundles called trances and resold them to investors as mortgaged-back securities. The mortgage defaults started to pile up and buyers were left with worthless documents. Banks lost money and went bankrupt, and lending stopped. Part of the issues came from the government requiring banks to use mark to market accounting and faulty home loans on their books. No one I know was affected by the credit crisis but the topic is well known as there were many families that lost homes and money because of this.
Reply #4: A key role that financial markets played during the Credit Crisis was to help assist with any financial management a company may need in regards to receiving funds from investors. Another role of financial markets during the Credit Crisis was to support surplus units that may have been interested in investing in securities. Aside from facilitating the sale of securities, the markets also provide investors with various investment opportunities (Madura 2020). While my family was lucky to not have been affected by the Credit Crisis, many families we know were. My uncle was one of the few that eventually had his house foreclosed because of his inability to repay. Before the strict regulations were set in place, he was sold a house where the mortgage was set as an adjusted rate mortgage (ARM). This means that instead of one flat rate for the term of the loan, it can increase over time. My uncle wasn’t aware of the type of loan he was approved for and over time, was not able to pay his loan anymore. This led to the foreclosure of his home early in 2008. Predatory lending was a very big problem and it’s good that there are regulations in place that protect us from the risk of this happening again.
Reply #5: Looking over the debt clock was very overwhelming. There are so many numbers for different things that are quickly increasing as you watch. I was unaware of how much debt everything had. The three areas that I reviewed on the debt clock are Medicare/Medicaid, social security, and interest on the debt. Working in the medical field and seeing the different people with medicare and Medicaid I had a strong assumption the debt would be high considering how much Medicare pays for seniors. I was very shocked to see that number in the trillions though. Medicare is a single-payer social health insurance program funded by FICA Payroll Tax contributions for citizens 65 and older. Many people think that Medicare will run out by 2026. Social security is a social insurance program funded through dedicated payroll taxes according to the Federal Insurance Contributions Act (FICA). It’s scary to think that the social security debt is in the trillions. Many people think that social security will run out of reserves in 2034. I was unaware that working people funded social security to pay for the older generation. To think that medicare and social security are already in so much debt, my generation will not have this as an option when retirement comes along if things do not change.
Reply #6: Credit Card debt is something that seems to keep growing over time. In 2019, the Credit Card debt was at $930 billion and is currently over $1 trillion (White 2022). The biggest issue in my opinion is the lack of education on the subject. I believe that credit card debt is a very hard hole to get out of and proper education should be provided to help educate in the dangers of credit cards. The US Total debt is currently over $86 trillion, which is insane. This is the total of all governments together, like business, local, federal, etc. The issue here is that it seems to always be going up. This is an issue because rising debt can impact economic stability and eventually lead to a poor value of the US dollar during trade, economic growth, and possible unemployment. Student loan debt is an issue I’m sure a majority of us contribute to. The main issue with this lies that many students go into debt and are unable to find a career sufficient enough to pay the loans off. Even if student loans are forgiven, the debt has to go somewhere. It doesn’t disappear and that means the country still has to pay the debt one way or another.