Code of Ethics and Standards of Conduct

What We Owe You

Eight commitments, each written specifically enough that you can tell when we have broken one.

Most firms in executive benefits describe their principles in adjectives. Independent. Objective. Client-focused. None of those can be tested, and a client has no way to tell whether the firm across the table means them.

What follows is written to be testable. Each standard describes something we will do or will not do, in circumstances that actually come up in this work. If we fail one of them, you will be able to point at the sentence.

These standards apply to every Arctis engagement and are incorporated by reference into every engagement agreement we sign.

The commitments

01We act as a fiduciary to our clients in the advisory services we provide.

02We are paid by our clients and by no one else.

03We hold no relationship with any carrier, vendor, or product manufacturer that could shape our advice.

04We present illustrations and projections honestly, including what they do not tell you.

05We disclose anything that could reasonably affect our judgment, before you engage us.

06We state the limits of our competence and refer out rather than exceed them.

07Every analysis we deliver is yours, documented well enough for someone else to follow.

08We protect what you tell us.

01Fiduciary duty

We act as a fiduciary to our clients with respect to the advisory services we provide, and that duty is written into every engagement agreement. It carries three obligations.

Loyalty. We place your interests above our own. Where our interest and yours could diverge, we tell you before you engage us, and we do not rely on your not noticing.

Care. We bring the skill, thoroughness and judgment the engagement calls for, applied to your actual circumstances rather than to a template.

Following your direction. We follow your reasonable and lawful instructions. Where we think an instruction is a mistake, we say so plainly and in writing, and then we do what you decide.

We are not an ERISA fiduciary, an investment adviser under the Investment Advisers Act, or a trustee. We do not hold your assets, exercise discretion over your contracts, or manage investments. The duty we take on is to the advice.

02Compensation

Compensation is the mechanism by which advice in this field most often goes wrong, so we have removed the mechanism rather than disclosed it.

2.1Our fee is a flat amount, stated in writing and agreed before any work begins.

2.2Our fee does not change based on which product, provider, or structure we recommend, or on whether you implement any recommendation at all. We are paid the same to tell you to keep what you have, to change it, or to unwind it.

2.3We accept no commissions, overrides, revenue sharing, marketing allowances, expense reimbursement, conference sponsorship, or compensation in any other form, from any insurance carrier, vendor, or product manufacturer.

2.4We neither pay nor accept compensation for a client referral.

2.5We do not charge fees based on assets, cash value, death benefit, premium, or the size of your program.

2.6We do not sell insurance and we do not place contracts. Where a recommendation requires a product, you execute it through a producer of your choosing and we receive nothing from that transaction.

03Independence

Independence means more than not being paid by a carrier. It means owing nothing to one.

3.1We hold no agency appointment, distribution agreement, production requirement, or contractual relationship with any insurance carrier.

3.2We have no preferred carrier, preferred product, or house design, and we do not maintain a shortlist that a client’s circumstances are fitted into.

3.3We do not accept travel, entertainment, or hospitality from carriers or vendors.

3.4Where our analysis covers a product or structure offered by a firm we have any relationship with, we say so before you engage us.

04Illustrations, assumptions, and projections

Almost every executive benefit decision rests on a projection of something that has not happened yet. How that projection is handled determines whether a board is informed or merely persuaded.

4.1Carrier illustrations are generated by appointed producers. We hold no appointments, so we do not run them. We tell you precisely which scenarios to request and from whom, and we analyze what comes back. Not controlling the software that produces the numbers is a consequence of our independence, and our analysis does not depend on it.

4.2We will not build an opinion on a single illustrated rate. Where a proposal arrives with one scenario, we require the additional scenarios before we will opine, or we model the range ourselves.

4.3For any policy whose crediting can reach zero, our analysis includes a sustained zero-credit case, not only an average or a single bad year.

4.4We identify which elements of any illustration are guaranteed and which are current assumption and can be changed by the carrier without your consent. We name the specific elements rather than referring to them as a category.

4.5Where a carrier has previously reduced a non-guaranteed element of the kind a projection depends on, we say so.

4.6We do not compare products with different guarantee structures on illustrated values alone without stating what the comparison omits.

4.7We state the assumptions behind our own modeling in every deliverable, in a form you can change and re-run with someone else.

05Conflicts and prior involvement

A conflict disclosed after you have relied on the advice is not a disclosure. It is an explanation.

5.1We disclose any relationship, interest, or circumstance that could reasonably be expected to affect our judgment, in writing, before you engage us.

5.2Where we are reviewing a design, product, or proposal originating with a firm we previously worked for or with, we disclose that history before the engagement begins, whether or not we believe it affects our analysis.

5.3We do not advise an employer and an executive on the same arrangement without the written acknowledgment of both.

5.4Where we believe a conflict cannot be managed, we decline the engagement rather than disclose our way into it.

06Competence and scope

The most expensive advice in this field is usually given by someone answering a question slightly outside what they know.

6.1Every engagement states in writing what it includes and what it does not.

6.2We do not provide legal, tax, accounting, or actuarial opinions. Where a decision requires one, we say which one and why, rather than approximating it.

6.3We do not recommend securities, select investment managers, direct allocations, or manage investments.

6.4Where an engagement would require expertise we do not have, we say so and decline or refer, rather than learning on your matter.

6.5We do not provide plan administration, recordkeeping, or ongoing reporting.

07Your record

You are usually buying a defensible record as much as an answer. The record has to survive us.

7.1Every engagement produces written work product, and it is yours.

7.2Our analysis is documented well enough that your counsel, your auditor, your examiner, or a firm that replaces us can follow what we did and why.

7.3We do not withhold or delay delivery of completed work to encourage further engagement.

7.4You may use our work to evaluate other firms, including firms competing with us, and we will not ask you not to.

08Confidentiality

8.1We treat non-public information you give us as confidential, and we use it only for the engagement.

8.2We do not name you as a client, describe your arrangement, or use your engagement as an example without your written permission.

8.3We do not share your information with carriers, vendors, or any third party except at your direction or where the law requires it.

If we fall short

Tell us. Every one of these is written as a specific act or omission so that a failure is identifiable rather than arguable, and so that you are not left deciding whether you are being unreasonable.

Alexander Bebis, Owner and President

Not every situation requires an advisor.

Tell us what is in front of you and we will tell you whether you need us.

(508) 972-8523

info@arctisadvisory.com