This evening, I washed the dishes after a tasty meal of my wife’s lasagna. Naturally, my 20-something sons took the opportunity to take showers at the same time, so we all rapidly ran out of hot water.
This turned out to be a blessing in disguise for me. Hot-water cleanup of sticky cheese tends to do little but spread and smear. Turn on the cold water and the cheese becomes more brittle and washes away without contaminating anything else. Hot water is good for many cleanup chores, but cold water has it’s place.
I don’t suppose that cold water was good for my son’s showers.
A sticky subset of financial education is ethics education. Most, if not all, licensing bodies in the financial professions require ethics education. The idea is that the public—consumers of financial services—are protected by teaching financial professionals about ethical rules. But does it? And does the run-of-the-mill ethics education stick?
Being able to recite rules is different from applying them in day-to-day practice. This is true in many areas of knowledge. And this difference is captured in a framework called Bloom’s Taxonomy of Learning Domains. Different learning strategies are required to be effective in teaching, say, application of ethical rules versus the ability to merely recite them. Just like hot water is good for some cleanups but cold water is good for others.
Ethics is situational. Now, I’m not talking about situational ethics, where the rules change depending on the situation. I’m talking about rules that are meant to be followed.
The situational part is where applying ethical rules gets difficult. When you are in the heat of a situation, you need to recognize an ethical problem and you need to decide how to act on the fly. The heat of the situation makes us forget the rules we learned to recite so well.
Unless we rehearse our responses. And, of course, we can’t rehearse our responses on real clients.
What we need is what many organizations use to train people with dangerous jobs: similators. Can you imagine a pilot being trained to respond to a flight emergency without a flight simulator?
The job of a financial professional may not be so dramatic, but people’s fortunes are at stake. Ethical lapses can wipe out a couple’s retirement savings or leave parents unable to send their kids to college.
So some sort of ethics situational simulator is required. It doesn’t have to be fancy, but the purpose is to put the learner into a situation, get them to respond, and give them feedback on whether their response was appropriate or not.
By giving the learner experience in solving ethical dilemmas in simulation, maybe we can keep them out of hot water when they’re out on the job.