Ethics…What is the Right Answer?

Ethics…What is the Right Answer?

I received a phone call from a colleague asking me an ethics question regarding a financial neutral.  Shortly after giving my advice on the matter I had a call with two of the drafters of the IACP Ethical Standards and they had differing opinions on the issue.  So, is there always a right answer to an ethical issue?  Or is it a matter of opinion?  Here is the scenario.  Let’s see what my readers say.

You are in the middle of a Collaborative matter.  One of the most significant financial issues is a very large IRS liability that includes penalties and interest.  This matter is paramount to settlement.  The Collaborative Financial Neutral informs the team and the clients that he/she is an expert at dealing with the IRS on such matters and would be happy to work on reducing the liability on behalf of both clients.


According to Section 3.6 of both the IACP and FACP Ethical Standards a financial professional will not have any other business or professional relationship with a Collaborative client during or after the conclusion of the of a Collaborative matter….

Further, Section 4.4B. which deals with services after resolution of the process states that with the consent of the clients, a Financial Neutral may provide services so long as those services do not violate Section 3.6 and remain consistent with the neutral’s role in the process.

Here are my interpretations.  First, Section 3.6 speaks of a Collaborative client, singular.  In this matter the financial neutral will still be working for both clients equally.  Note that when I mentioned this to the IACP drafters they scolded themselves for having missed that interpretation and suggested it should have been plural.  More importantly to me, is that the work being proposed should in now way affect the expert’s neutrality in the Collaborative matter.  

Here is another interesting tidbit for discussion.  It has always been my opinion that a financial neutral could prepare a “final” joint tax return for the parties (I haven’t done this before) if they both agreed.  Again, preparing a return should not affect neutrality.  The IACP drafters said that was not their intent and don’t believe it is permissible.


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