Academic journal article ABA Banking Journal

One Way to Rebuild Trust

Academic journal article ABA Banking Journal

One Way to Rebuild Trust

Article excerpt

A GREAT MANY BANKS AND savings institutions rightfully feel that the ignominy heaped upon the industry by an angry Congress and its media cohorts is not justified by anything they did. Feeling abused, however, won't make the tarnish go away.

An article in this issue suggests a way to not only remove the stain of reproach, but to enhance the industry's standing.

In his thoughtful assessment of the wealth management market--"What are the new best practices?" (p. 22)--Fortigent Senior Managing Director Scott Welch makes the point that providing information and data is not enough to differentiate one wealth advisor from another--most do that. "Differentiated advisors know the key is to ... [also] deliver knowledge, understanding, and wisdom." While we would question whether wisdom is a deliverable, clearly knowledge is, and certainly assisting people to understand their financial situation is a worthy and achievable goal, and one that applies not only to wealth management, but to credit cards, mortgage loans, and banking generally.

Welch also talks about the issue of lost client trust. Wealth managers not only had the effects of the financial crisis to deal with, but the impact of Bernard Madoff and his ilk. Yet Welch suggests that there are other factors contributing to the lost trust. One is that inherent conflicts of interest can, and often do, detract from a feeling of trust between advisor and client. One example: being paid based on business brought in despite being hired under the assumption of working in the client's best interest. He suggests a wealth management version of the Hippocratic Oath, a portion of which is mentioned in the article. Here is the suggested oath in full:

"1. …

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