Why There is No Substitute for Trust in Finance
Trust has a place of value and significance in any conversation. This is particularly true in the context of finance – for financial advisers and financial institutions. Here, trust is central.
For the financial entity, trust is a key strategic asset. And, you can understand why. It strengthens customer relationships and fosters deeper and more meaningful engagement. It creates a competitive advantage and opportunities for growth.
For the customers using the financial product or service, trust is pivotal to be established before any transaction takes place. It boosts the customers’ confidence and creates an environment conducive for such an exchange.
From the customers’ point of view, trust is essential if they are to feel safe and secure in revealing details about their financial positions, goals and ambitions. Not to mention, the personal sensitive information regarding their identity, money and assets. The onus is on the financial institutions to be able to keep the details confidential and exercise prudence under all circumstances.
The question of trust begs greater attention in our digital age when online thefts, scams and hacks are common. This has caused the unbundling of trust. Hackers can steal sensitive details from systems and even recover credentials that give them direct access to your account (phishing). Online identity thefts are common too, where hackers impersonate you to gain access to your online accounts such as shops, clubs and memberships.
It is imperative that both – the financial entities (including the advisers and the institutions) as well as the customers be aware and vigilant. And take measures that reduce (and finally, eliminate) their impact.
In this week’s blog post, we discuss our perspective on trust and why it is important. There is really no substitute for trust in finance – Let’s see why.
Trust in the current context
The findings from the Banking Royal Commission and other recent incidents and reports of misconduct on the part of financial institutions have contributed to the atmosphere of distrust. In such a situation, rebuilding trust is indeed a big priority for the industry.
We’ve seen the industry respond by doing just that - From implementing recommendations that ensure greater prudence and informed decision making, to applying improvements in processes and protocols governing financial advice and instruments, there have been several changes.
Fintech and technology
While technology (and fintech, particularly), have the ability to provide solutions that are cheaper, faster and sometimes smarter too, there are several inherent threats in their value proposition. For example, with the relatively new and untested blockchain technology that supports cryptocurrencies. These cryptocurrencies are introducing a new degree of volatility and instability in the market. The same goes for fintech that are in their very nascent stages – creating a new basis of trust and working on the premise of an assumed trust, until the gaps in their approach are exposed.
For financial advisers
For financial advisers such as us, who offer financial advice, the question of trust is the most immediate one. Trust governs everything – from building a deeper understanding of the customers’ nature, wants and aspirations, to dispelling misinformation, having an open conversation and making relevant suggestions. Credentials – qualifications, certifications and exams, experience and reputation – are all pillars of trust for us.
With a combined experience of over 60 years of consulting, we are committed to our client’s welfare. Trust and credibility are our core values. And we are doing our bit in bringing these to the forefront in our practice and in all of our relationships.
If you are looking for sound financial advice that is rooted in trust, ethics and integrity we are your advisers of choice. Come talk to us today.
General Advice Disclaimer
The information contained on this website and in this blog-post is general in nature and does not take into account your personal situation or circumstance. It is recommended that you consider and use the information provided responsibly, and where appropriate, seek professional advice from a financial adviser.
Although, every effort has been made to verify the accuracy and correctness of information, Oakmont Financial Group, together with our consultants, officers, agents, and employees, disclaim all liability for any loss or damage suffered by any persons directly or indirectly relying on this information.