It’s no secret that the financial world suffered from a systemic lack of trust in the wake of the Great Recession – trust in its institutions, services, practices and transactions. While it has certainly come a long way in the last few years – as evidenced by the news earlier this month that all 31 big banks passed this year’s Federal Reserve stress tests – there is still a long way to go.
According to the 2015 Edelman Trust Barometer, only 54 percent of respondents trust business within the financial services industry to do what is right. What’s more, the University of Michigan’s recent Survey of Consumers found that when consumers were asked how their confidence in the Federal Reserve had changed over the past five years, 42 percent reported that they now had less confidence.
Earlier this month, we attended the Financial Women’s Association’s “Living Our Purpose to Make Financial Lives Better” breakfast with John Thiel, head of Wealth Management at Merrill Lynch. That discussion inspired us to think more about building trust from an industry perspective and how 1) it is more important than ever for financial services professionals to embody and exude the principles of authentic leadership and transparency in everything they do, every day and 2) the interactions between advisors and clients are the foundation for building trust in the industry. Those everyday interactions, and the trust they build, ultimately play into the greater trust of the team, office, company and industry.
From an informed perspective, the Trust Barometer found that there is still a large gap between the behaviors that are believed to be important in building trust and agreement that the industry is performing well against those behaviors.
The Trust Barometer outlines 16 key attributes – ethical business practices, listening to customer needs and feedback, and high-quality products and services, to name a few – to building trust. Those attributes fall into five key performance clusters: integrity, engagement, products and services, purpose and operations.
We’re excited to see the Financial Services Trust Barometer data released in April but the real change is occurring, and will continue to occur, as those trust-building attributes are communicated and adopted, and collaboration increases among colleagues, teams, offices, companies and the industry as a whole. That will ultimately create the necessary shift in business models that will form a better environment to foster accountability throughout the industry and lead to trust from consumers.
The full findings of the 2015 Edelman Trust Barometer for the financial services sector will be available starting April 8.
Katherine Burns is an account supervisor in the Financial Services practice at Edelman New York.
Rachel Rapp is an assistant account executive in the Financial Services practice at Edelman New York.
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