Sunday, September 29, 2013

Who buys the books when?

Every summer for the past several years, my wife and I attend a public library book sale that occurs right around the July Fourth weekend in Massachusetts. The goal is to raise as much money for the public library as possible.

The sale is massive and lasts for several days. From the minute the sales tents open, the general public and used book dealers pore over the offerings. When the tables get low, more boxes are opened and more books displayed.

While the resellers may pile up more volumes than they plan to take and sometimes slow down perusing time by using smartphones or tablets to check a book's resale price, there's a general collegiality among the customers, who are all vying for the same great find.

On the final day of the sale, when pickings are slimmer, books go for $1 per bag.

A while back a reader from another community told me of her experience with her own community's public library's annual book sale and how it "may not be what it seems, or what it used to be."

Apparently, the library has a contract with an online book dealer who "cherry picks all the good stuff" to buy, she writes. Once the online book dealer has its way, the library then permits volunteers working on the sale to choose from what's left.

Only then do the books go on sale to "friends of the library," who pay a special annual fee first, and then the general public later. My reader says she falls in the latter category "because I'm cheap."

The reader indicated that longtime patrons of the sale who don't fall into special privileged categories have begun to complain and are frustrated by the increasingly slim pickings.

"Is she right, that it's a bit of a rip-off?"

It sounds to me like the makings of a lousy book sale for the general public. I know that on the last day of the community book sale I attend, you might be able to buy a bag of books for a buck, but everything's been really picked over during the prior several days of the sale. My reader's sale sounds like the general public is facing final day pickings right from the get go.

Nevertheless, if the reader's library makes it clear how it is operating and who gets first picks and when, then a buyer has the opportunity to decide whether to bother with the sale. While the community spirit of the book sale may be dampened if the general public knows it's getting the dregs of offerings, if the library determines it can raise the most funds by creating tiers of buyers, then that's a fair decision.

The right thing is to make the rules of the book sale as transparent as possible to all comers.

Granted, my reader's sale doesn't sound like one I'd expect much from if I were a member of the general buying public. The organizers would be wise to determine if the long-term effect of their policy is to drive away so many customers that their fundraising strategy doesn't pay off. 

Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to 


Sunday, September 22, 2013

Telling clients the truth even if it drives a wedge

I am not a divorce lawyer, financial adviser or couples counselor, but a reader who is an investment adviser sought my counsel about an issue that likely could use the wisdom of someone engaged in all three professions.

The reader sought advice about "pre-divorce" counseling, an interesting term since most married couples would likely refer to themselves as "married" rather than "pre-divorced." Since a couple's assets are split in a divorce under specific rules, the reader wanted to know if he should discuss divorce rules when advising a client about an inheritance.

As he explains it, inherited assets remain "separate property," if the inheriting client keeps the assets in her own name. So if Ms. Smith receives an inheritance and puts it into the "Ms. Smith living trust," she keeps it all in the case of divorce. If she puts the money into the Ms. and Mr. Smith joint checking account, it has now been co-mingled. If the couple should divorce, the funds are subject to a 50/50 split because of the co-mingling.

"If I bring the subject up, it can drive a wedge into an otherwise happy marriage," my reader writes. ("Gee dear, you don't think we'll have a future together?") His concern is that if he doesn't bring it up and the client co-mingles the assets and loses half of her inheritance in a divorce, then the losing spouse will sue him. On the other hand, if he advises the inheritor to create a separate trust and the couple divorces, then that losing spouse sues him.

"Or," he writes," I drive that wedge into a happy marriage and divorce ensues. I get sued."

Either way, he figures, "I've created a problem." He doesn't care what they do, only that he protect himself from liability for "home wrecking."

"Should I bring it up at all?" he asks.

I can't tell my reader how to protect himself from such a liability any more than I can tell him how to protect himself should he give his clients investment advice that turns sour.

It's not up to the financial adviser to make the decision about what to do with a couple's inherited money. But it does seem to be his responsibility to lay out the couple's options and to be explicit about the positives and negatives of various options. Presumably, such advice is what the couple is going to the financial adviser for in the first place.

Couples may not want to discuss the possibility of death either, but that doesn't let estate lawyers off the hook from explaining how to best protect their assets should they die. To not do so would simply be irresponsible. Similarly, when a couple goes to a financial adviser for financial advice, he should give them the best advice he can give them and lay out all the options from which they can choose.

Because his clients are going to him for financial advice, then the right thing for the reader to do is to give them the best advice he can give them, even if that means bringing up issues that might be uncomfortable. If that drives a wedge in the relationship, then it's their responsibility to decide how to navigate that wedge. 

Jeffrey L. Seglin, author of  The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business and The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apartis a lecturer in public policy and director of the communications program at Harvard's Kennedy School. 

Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to 


Sunday, September 15, 2013

How to handle a bad reference

The late Pierre Mornell, a renowned psychiatrist and author, was an expert in hiring practices. A particular piece of his wisdom sticks with me and has affected how quickly I respond to emails or calls seeking employment references for former colleagues or students.

Pierre told me that if you're calling a reference you can get a good sense of how highly the person thought of a prospective employee by how quickly he returns your call. If it takes days to get a response, Pierre suggested this might be an indication that you weren't that high on the person and his talents. If you responded within a few hours, it more than likely suggested that you thought enough of the person to want to assist him in getting the new position.

Granted, circumstances sometimes prevented a reference from responding as quickly as they would like to support Mornell's principle. But regardless of where I am when I get a reference call about someone whose work I found strong, I try my best to respond quickly.

Pierre's wisdom about hiring and reference practices would have come in handy for a recent conundrum that came my way.

Several employees at a business have found a recently promoted colleague to be less than exemplary in his new position. His treatment of those reporting to him has been unpleasant and they've found his business practices to be troubling. Still, the elevated employee seemed to have the ear of those above him who didn't seem to be moving fast enough to address the rank-and-file employees' concerns.

As their complaints grew louder and more consistent, however, it appeared that the questionable employee recognized that his long-term viability at the business might be limited. Word got out that he was looking around for new positions elsewhere. The employees reporting to him figured he was looking for a new job while he was still in a position of authority.

The question arose of what these employees would do if by chance they were asked by a prospective employer what it was like to work with this boss. If word was out that their boss was difficult to work with, would they confirm this even if it meant that such confirmation might result in his inability to land a job elsewhere?

One employee suggested that they should smarten up and heap praise upon the fellow if that meant the chances of having him become someone else's employee were increased.

What would Pierre have advised?

The right thing is not to exaggerate about the employee's perceived negative attributes, regardless of your personal feelings. But neither should you concoct a fiction about his positive traits simply to try to get rid of him. Instead, either defer to someone else in your business who might be better able to respond to questions about him or just confirm that you worked with him.

Sure, doing so might send a message that by not saying anything you don't have anything good to say. But that's a better approach than being untruthful about the person. Lying calls your integrity into question, not his. If you wait a few days before responding to any request for a reference, however, that might speak volumes. 

Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to  

Sunday, September 08, 2013

Deciding whether to do your best work

A reader who is an investment adviser from California writes that over the years he's discovered that a particular client sometimes executes the investment ideas he gives to him through others -- a "brother, friend, or whatever."

The reader recognizes that because of the client's personal relationship with the other adviser that this situation is not likely to change. But, he writes, that he is far more skilled than any of his clients' friends or brothers.

"So I'm being used for my ideas and given a few crumbs to keep me happy," he writes.

While the clients don't demand a lot of time, he writes that he can see that he is having an "outsized effect" on their financial situations because of the good ideas he presents them that they then execute through others.

"Considering that these clients will continue to give me small business and give the big stuff to others, should I continue to give them my best ideas?" he asks.

The reader writes that he always refers his clients to lawyers for trusts, wills, and other legal documents. "I do it as a free service," he writes. "Failure to set these things up on a timely basis leads to a great deal of unhappiness later for clients or their families."

Still, he wonders if he should tell his clients about these legal tools and send them to a lawyer if he's not getting all, or the bulk of, their investment business.

He wants to know the right thing to do about "this conundrum" he is facing.

"Financial advising isn't a charitable service in these cases," he writes, "so do I have a moral or ethical obligation to do my best work for a client who then places the business that these ideas generate with others?"

The reader asks quite a few questions. Other financial advisers or planners are fee-based so they charge by the hour or the plan. But because the reader's compensation is based on a percentage of money invested or managed, he only makes money if a client actually invests through him. The reader has no obligation to do business or spend his time giving advice to a non-client if he doesn't want to.

But once he decides to do business with a client, then the right thing is indeed to do the best work he can for those clients. It may infuriate him that these clients only invest a small percentage of their investment portfolio through him, but the reader would be on firmer ground severing business ties with a client rather than doing less than his best work.

Part of doing his best work includes making intelligent referrals to other professionals, such as lawyers, who can provide their own best work to the client. Holding back on such referrals because of a perceived slight that not enough of a client's business is coming your way is at best unprofessional.

The right thing is to either take on a client and do your best work, regardless of the size of his portfolio, or to simply pass on doing business with the client, if his portfolio is not large enough to meet the criteria you set. 

Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to