Photo by Bill Oxford on Unsplash
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
Click here to watch a video and learn more about Evidence Based Advisor Marketing.
Every day, we’re confronted with choices. They include issues that can profoundly impact our health, like diet, exercise and the reduction of stress. As recent events demonstrate, they may also involve ethical choices, which can cross the line into criminal behavior.
Why do good people make bad choices?
There are plenty of examples of bad conduct, both in the security industry and by corporate titans.
Brokers and investment advisors
According to a press release issued by the Department of Justice dated September 6, 2019, Gary Basralian, a former broker and investment advisor was sentenced to 70 months in prison for stealing “millions of dollars” from his clients to pay for personal expenses.
In one instance, he perpetrated this fraud by using a “phony spreadsheet,” indicating the client’s money was being invested in interest-bearing loans. Instead, it was sent to accounts he controlled and was used for his own benefit.
This is not an isolated incident. In January, 2020, Steven Pagartanis was sentenced to 170 months in prison and ordered to pay more than $6.5 million in restitution for defrauding elderly investors of over $13 million over nearly two decades.
You can see many more litigation releases involving alleged misconduct by advisors (and others) on the SEC website.
I have no first-hand knowledge about Basralian, Pagartanis or anyone named in the litigation releases accused of misconduct. I am confident their lawyers were able to harness some kind words about them in an effort to mitigate their sentences. I doubt they started their careers intending to harm people.
Douglas Hodge
Based upon press reports, Douglas Hodge, the retired chief executive of PIMCO, certainly appears to be a good person. His record of philanthropy included expanding educational opportunities for disadvantaged children. He reportedly gave away over $30 million to charter schools in California and contributed to an orphanage in Cambodia. He and his wife ran a foundation dedicated to mentoring girls and young women.
His obvious decency makes his conduct head-scratching. He paid at total of $850,000 in bribes to have his four children admitted to Georgetown and the University of Southern California, using fabricated athletic qualifications.
For his crimes, he was sentenced to nine months in prison.
Marketing Services For Evidence-Based Advisors...and a New Book!
We offer consulting services on how to convert more prospects into clients through Solin Consulting, a division of Solin Strategic, LLC.
We offer a full range of digital marketing services exclusively to evidence-based advisors through Evidence Based Advisor Marketing, LLC . You can see examples of our work here.
I'm working on a new self-help book for the general public. It's called:
Ask
How to Relate to Anyone
Ask will be published in mid-2020. For more information, click here.
Schedule a call with Dan here
Why?
Among the many explanations offered by experts for why good people engage in bad conduct, the “compensation effect” is a likely culprit. It refers to the rationalization good people make to justify engaging in bad conduct. In the case of Hodge, he might have thought that he was an exceptionally good person who had engaged in major acts of kindness and charity. Having built up these “good” credits, he felt entitled to engage in what he may have considered minor bad acts, especially because it benefitted his children.
As explained by Dr. Travis Bradberry, it’s like, “a piece of chocolate after a week of salads.”
He could also be a victim of the blinding effect of power, and perceived himself as inherently different from most people. It’s a small step from that flawed thinking to assuming his vast wealth gave him options unavailable to the rest of us.
To explore marketing and branding opportunities with Dan’s new book, Ask: Be Liked. Be Better, click here.
Read more articles by Dan Solin
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
