"I am a great and pleasant professional, so you can trust me"; Unfortunately, that is not the way we earn the trust we need to succeed as a wealth manager. By Kees Stoute
In the best-selling book, The Trusted Advisor, David H. Maister, Robert Galford and Charles Green offer practical and inspiring insights into the secrets of winning trust.
The authors summarise trustworthiness in the following equation:
Trustworthiness = (Credibility + Reliability + Intimacy) / Self-orientation
By putting ‘self-orientation’ as the sole variable in the denominator, this variable automatically becomes the most important of the four.
We can have a Harvard degree (= high credibility), always do as we promise (= high credibility), and have an impressive ability to make people feel comfortable with us (= high intimacy). But as long as our clients perceive that we are in the relationship to benefit from it personally (= high self-orientation) we won’t be trusted.
A high score on self-orientation effectively ruins whatever we score on credibility, reliability and intimacy.
What we should do differently
The fact that the financial industry scores consistently low on trustworthiness (see Edelman’s Trust Barometer) can to a large extent be explained by the fact that there is a common perception among the public that generating revenue – and not helping clients – is the primary interest of wealth managers.
In other words, for wealth managers, a high score on (perceived) self-orientation is the single biggest hurdle when it comes to developing trust.
From this perspective, it is intriguing to observe that in their efforts to (re)build trust, most financial institutions tend to focus on increasing credibility (eg. through improving technical competency), reliability (eg. through IT), and intimacy (eg. through skills training).
Not much – and certainly not enough – is done to address the key challenge: how to lower self-orientation? Or to put it another way: not much is done to ensure that wealth managers enter into client relationships with the sincere intention of helping clients, and as such to contribute to an improvement in the quality of their lives.
A greater focus on lowering perceived self-orientation requires two approaches:
1) We need to ensure that wealth managers are confident that they actually have significant value-adding potential. Wealth management professionals have superior knowledge and experience when it comes to aligning wealth with the objectives clients have in life. As long as practitioners are not deeply convinced about this potential, it is difficult to approach clients confidently, thus almost unavoidably leading to higher levels of (perceived) self-orientation.
2) Clients should be made aware of the value-adding potential of professional wealth management. Research indicates that the more knowledgeable clients are with regards to what they may expect from a good wealth management service, the higher their level of faith in the industry. In other words, client education potentially contributes to lowering the perceived self-orientation of wealth managers.
The key to success will be to effectively lower perceived self-orientation. This should therefore be on top of the agenda of any institution that aims to build a sustainable wealth management business.
Managing Director at Hubbis
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