Holly's blog: Trust, competence and firemen
11 July, 2017
What is trust?
At our annual conference this week, which gathered together 200 people from fund managers, pension bods, banks, robo advisers and online investment businesses, we spent the whole day talking about how to do a better job when it comes to talking to our customers. One topic on the agenda was trust.
Our industry knows it’s down there with politicians and estate agents (well done us). A lot of lip service is paid to rebuilding trust but when I hear people say that, they almost inevitably then fail to outline HOW. So what is the secret sauce of trust? What is that internal algorithm we start to fine tune from a very early age? What is trust?
Herman Brodie, author of The Trust Mandate, argued it’s a combination of perceived competence and benevolence. How capable we are combined with how likeable we are.
Let’s look at how Europeans stack up
Although it would be interesting to re-run this study post Brexit shenanigans, this chart is a snapshot of European economics, politics and history. People were asked how they perceived their own nation. And how they perceived others'. We Brits think that we are less likeable than other nations do – we’re actually marginally higher up the benevolence axis in the eyes of other nations. But before we get carried away, we’re far less benevolent than the Spanish, Italians, the Greeks and the Swedes.
This chart tells us we admire the Germans but we don’t love them. The poor old French are neither admired nor loved as much as they think they are. And it’s interesting to think about the economies of those nations in the top left corner. We love ‘em but we don’t see them as competent.
Why we love firemen
Turning our thoughts to industry and professions, it is no surprise that the finance industry is generally thought of as competent but almost entirely lacking in benevolence. Whilst doctors are liked and admired in equal positive measure – these guys have the magic formula of benevolence and competence.
Firefighters are viewed as the most trustworthy profession across all global regions. (I have a third dimension I’d add when it comes to how I perceive firemen but I’m not sure that’s allowed in any scientific analysis!) Lobbyists, telemarketers and traffic wardens are the least trusted. But there are still some country-to-country variations. In Nigeria, Kenya and the Philippines, farmers top the list. In Indonesia and India teachers are the most trusted.
Although I present this in a light-hearted way, there’s a really serious message in here for finance professionals.
My theory is that most of us (unless we are sociopathic politicians with an overinflated sense of entitlement) suffer from imposter syndrome. There’s a concern that we’re not good enough. We’re lacking in knowledge. Our peers are smarter than us. I know I’ve felt this in some board situations where I’ve been 10 years younger than everyone else and the only woman. And it’s super hard in these situations to stick your neck out and say “Hey. People find money emotional. Scary, Intimidating. It makes them feel thick/poor/unsuccessful/inadequate. Let’s dial down the jargon and talk about it in everyday human terms. Forget Maths, chaps, this is about EMOTION!” Silence.
My experience is that it actually takes cojones of steel to suggest to a room typically packed with mathematicians, actuaries and engineers that they need to dial up on benevolence and stop trying to shove their bloody competence down everyone’s necks. Endless shouting about how you generate superior alpha with your emerging markets ETFs at a lower standard deviation, is not what most of us need to hear.
So here’s the challenge. Where does your firm, business or institution sit on the benevolence/competence axis? What about you personally? And do you need to ease off the gas on one to boost the other?
P.S. Thanks to our lovely sponsors Architas, Charles Stanley Direct (https://www.boringmoney.co.uk/isas-pensions/charles-stanley-direct/) and EValue for supporting our conference and making it possible. Thanks also to our media partner for the event, The Times and The Sunday Times.