Charles H. Green, founder and chief executive officer of Trusted Advisor Associates, has developed an equation of four elements that he says determines whether trust is established between two people.
The trust equation
The trust equation has four components, Green says. These are credibility, plus reliability, plus intimacy, divided by self-orientation.
“Credibility means basically I believe what you say, reliability means I can depend on what you do, intimacy means I feel safe sharing this stuff with you, and self-orientation is about who you’re focused on,” says Green.
If someone thinks you are focused on yourself, they are unlikely to trust you, according to Green. If they think you are focused on them, they are very inclined to trust you.
“The most powerful factor is intimacy,” Green says. “Do people feel safe and secure with you?”
Rational or emotional?
The process of deciding to trust a person is both rational and emotional, according to Green.
“People make up their minds with their emotions, and then after the fact tend to justify it with the rational mind,” says Green. “So we buy on the gut and rationalize with the brain.”
You have to be credible and reliable, and you can’t fake it, he says.
Green says it may sound cliche, but “people don’t care what you know until they know you care.”
“In other words the right sequencing of the a sales process is first you listen and then you come in and offer advice or ask for the sale. And so often we don’t do it that way,” Green says.
Spend more time than you think is necessary listening to your client, he advises.
“People who really connect and say let me break this down and tell you what it means for you, those are the people who have much greater impact because they speak in terms relevant the client,” Green says.
The trust deficit
The financial services industry has lost trust, Green says, and one of the reasons is self-inflicted. The entire industry spent decades talking about how it would get great returns, but then the financial crisis occurred.
“If all you’ve been talking about is return on assets and asset management, and you’ve been flat for a decade, you just lost a whole lot of credibility,” says Green.
The behavior of major financial institutions also adds to the trust deficit, according to Green. There were “extraordinary, institutional-level, systemic, repeated, in-depth violations of trust on the part of major financial institutions over a long period of time,” Green says.
“There is no doubt the financial sector has not behaved well and that unfortunately ends up tarring everybody, including an awful lot of very well-meaning, well-intended financial planners,” Green says.
What financial planners can do
Just pick up the phone, says Green.
“The ones who are gaining business are the ones who pick up the phone and call up their client and say, ‘How you doing? Things are terrible right now. You have to be hurting – talk to me.’ In other words they treat their clients as folks they want to help rather than as people they want to sell products to.”
To listen to the entire interview, click here