February 25, 2012


prescription for trustFinancial services is still the least trusted sector on the planet (Edelman Trust Barometer 2012) but that’s where I work. Maybe that’s why I think about ways to help you spot trust. My definition keeps evolving. I thought I had the foolproof measure of trust in Nov 2010 ... but got fooled. Here is the latest — and ideally final — prescription.

Original (Feb 2007)

I first thought trust consisted of Chemistry and Credentials. Here’s why.
This is the instant snap judgment which Malcolm Gladwell discusses in Blink: The Power of Thinking Without Thinking (official website).

If you don't like the other person (let's say an advisor), why would you use their services? You usually have other choices. There's little point giving your tough-to-earn money to someone you don't feel good about.

Successful salespeople are masters at creating chemistry. That's an important skill in today's competitive world. That doesn't mean they can do the actual work. If they delegate, you might get stuck with someone you didn’t select and wouldn’t like.
Mastery takes time and deliberate practice. This is the "10,000 hour rule" from Outliers (Malcolm Gladwell).

Ultimately, you're paying to get something done. The work takes skill. That’s why a handyman is cheaper than an electrician or plumber. You can get the basics done but that might not be good enough since complications can arise during the process. More duct tape, please. If you don't value skill, you might as well trade down to the lowest price. Otherwise, you may trade up for quality (see getting what we want by distorting our spending).

Credentials could come from experience rather than diplomas or certificates. Yet formal learning shows a commitment to go through a rigorous (boring) process. That's an accomplishment. You needn’t learn everything in courses. Einstein said, “Education is what remains after one has forgotten everything he learned in school.”

Once you learn to learn, self-study is an excellent option. The results are more difficult to measure. Without discipline and monitoring, it's easy to get sloppy.

For instance, I became an actuary through a formal process of accreditation and apprenticeship. I now learn through self-study (mainly audiobooks, videos, books, magazines, blogs).

Version 2: Generosity (May 2010)

From working with advisors, I saw that Chemistry and Credentials were not enough. Advisors could be greedy and secretive. They wouldn't share what they knew. Upon digging, I'd often see they didn't know much (and were afraid of getting found out). Or they were afraid that competitors would steal from them. That's odd since they probably “borrowed” the ideas they claimed to have originated. I saw an example just days ago.

Trust required more. How about adding signs of Generosity. The formula becomes Chemistry, Credentials and Generosity.

Advisors who freely share the best of what they know show
  • an abundance mindset (rather than win/lose scarcity thinking)
  • continual learning (dated thinking shows)
  • better knowledge (since teaching is an ideal way to improve learning)
Social media gives free tools to share text (blogs), voice (podcasts) or visuals (video). Advisors with the desire to share can.

Let’s Get Real (Nov 2010)

I came across a two element definition: trust is Expertise and Intent. That's from a book called Let's Get Real by Mahan Khalsa. If you take Chemistry as an essential starting point, this formula looked fine.

In essence, Expertise means Credentials. Intent means showing that you're acting on your clients best interests on an ongoing basis. That's like Generosity.

This definition isn’t quite right either. It's better to make Chemistry an explicit requirement.

The Missing Element

Congruence is the missing element. It means, consistency, walking your talk, having no flaws of character, above suspicion, passing the "smell test", harmony.

We've been fooled so many times (at least I have) that we're sensitive to incongruity. Children are masters at detecting hypocrisy. Try telling a child to eat broccoli when you won't. Or to stay away from drugs when you can't function without coffee after coffee. Or to get off the computer when you're plopped in front of the TV for the rest of the evening.

Generosity and Intent are elements of Congruence but they aren't enough. For instance, an advisor on a nonprofit board looks generous but be hovering there to get business. A diabetic may lack the self-control to resist dessert, which may signal compromises elsewhere. If they break promises to themselves, would they remain true to you when times get rough?

The New Prescription (Feb 2012)

Here's the new definition of trust: Chemistry + Credentials + Congruence. Trust is at the intersection of
  1. Chemistry: how do we feel about them initially and over time? Salespeople excel at building relationships and are not burdened by fiduciary responsibilities.
  2. Credentials: do they have the technical skills to do the work? They may not be current in the newest developments and you might not know.
  3. Congruence: do the clues show that your interests take priority. Look for ongoing generosity and advocacy.


Think back to when you've been fooled. Would the new prescription for trust have helped you?


Podcast 157

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PS How would you improve the new prescription?

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