With 47 years of experience in the insurance industry and deep involvement in many of the associations that guide its direction and principles, Guy Baker knows a thing or two about the kind of ethical issues that insurance agents face on a daily basis.
That's why we decided to spend a few minutes with Baker, MSFS, CLU, ChFC, CFP, RHU, managing director of BTA Advisory Group in Irvine, Calif., a multi-disciplinary organization serving the needs of wealthy families and owners of closely held businesses. The former MDRT President and current AALU board member graciously shared his thoughts on variety of topics, starting with his own general overview about personal ethics.
"I think it's a difference between knowing right and wrong and having the courage to do right when you could do wrong," Baker said. He adds that people generally know what's right and what's wrong, but what they might not have is the courage to do right.
"My courage grew probably more from understanding the consequences of doing wrong, and not wanting to have to deal with those consequences," Baker continues. "And then learning to love doing right. There was a progression. When I was a kid, I probably wasn't the most ethical kid. I knew right from wrong, but as I paid the price for making the bad choices I began to realize what was right was right for more reasons than just not getting into trouble."
Insurance agents are faced with having to balance their ethical responsibility to clients with common sense and reasonable expectations, Baker said. As a board member of the Association for Advanced Life Underwriting, he constantly keeps up with regulatory issues that could potentially impact life insurance's longstanding tax-advantaged status.
"If I were to share with clients every possible permeation that comes out of Washington D.C., nobody would do anything," Baker said. "Ninety-five percent of everything they talk about out of Washington never happens, so what's my ethical responsibility? Warn people away from this, that and the other thing?"
One of the biggest issues in the industry is inside buildup, where the federal tax code favors permanent life insurance by permitting premiums to be invested on a tax-free basis. That favored status is frequently threatened by Congress, and constantly defended by lobbying efforts of AALU and other industry organizations.
