I’ve always enjoyed taking contrarian positions on topical issues.
But sometimes my views are so at odds with everyone else that they make me feel nervous. This is one of those occasions.
I think I must be the only person in financial services who doesn’t believe in the value of, need for, or even the possibility of a high level of trust between clients and advisers. The same goes for clients and providers for that matter.
While you climb back onto your chair, let me backpedal slightly. All consumer markets segment, so you can never generalise completely. I’m sure there are some clients who do have complete and unwavering trust in their advisers, and good luck to them.
But quite frankly, these days the large majority of us don’t have complete trust in anything or anyone except our nearest and dearest, and sometimes not even them. And time after time we’ve been proved right to feel this way.
To give you one of the least controversial examples I can think of, a friend recently received an email from his mortgage adviser giving details of the bank account into which he was to pay a great deal of money. A trusting individual would have paid up.
My friend, being the suspicious fellow he is, put in a call to the adviser to check. It was of course a money transfer scam – the scammers had hacked the adviser’s email and set up a fake bank account.
Here’s another one. About 10 years ago when I sold my business, my adviser at the time was insistent I should park the proceeds in an account which was far better than, and just as safe as, any cash deposit. Somehow he seemed a bit too keen, and I was dubious.
Soon afterwards, the account in question – AIG’s Enhanced Variable Rate fund – hit the headlines in one of the biggest misselling stories of recent years.
I could go on, but the fact clients are wise to be distrustful isn’t really the point I want to make. The point is this: how should we react to this situation?
To me, what we have to do is absolutely not to build, rebuild, or even maintain trust. What we have to do instead is manage distrust.
This means recognising most clients will – wisely – always feel some level of suspicion about everything we say and do. Our responsibility is to recognise those suspicions, respect them and do everything we can not to increase them any further.
This is a big challenge, and involves a 360-degree effort to avoid any kind of distrust-triggering behaviour, including lots of specific instances we’ve never really worried about in the past.
For example, clients are distrustful of small print, suspecting it contains either bad news or get-out clauses. We think it’s helpful to use tiny type for all the boring detail, not least to show they don’t need to read it. But actually it isn’t.
Clients don’t like weasel words like 'can' and 'may'. If we say we 'may' apply a particular charge, they think we definitely will.
They don’t like obvious attempts to pull the wool over their eyes, like communications about 'new' charges. They know 'new' means 'higher' – if the charges were lower, we’d say so. It takes a lot of thought and work to remove every single distrust trigger from every point of contact with your clients.
Somewhat melodramatically, I think of managing a client relationship as being like making a lengthy journey together along a tightrope. Minor false moves cause uncomfortable wobbles. But make a major one, and you’ll both fall off.
This seems to me to be a far more realistic and actionable way to think about trust than all the usual clichés. But I can’t deny I seem to be in a minority of one on this.