Public trust has crashed in the United States, the largest-ever-recorded drop in the Edelman Trust Barometer, a global survey of people’s attitudes toward their home country’s institutions.
According to Edelman, a global marketing communications firm, its trust index among the informed U.S. public fell precipitously from 64 in 2017 to 42 in 2018, a drop of 22 points. This makes Americans the lowest of the 28 countries Edelman surveyed, below Russia and South Africa.
The Edelman Trust Index represents the average percentage of people who trust their government, political institutions, media, and non-governmental organizations (NGOs). Trust among the general populace (as opposed to well-informed people) declined nine points to 43, Edelman said, putting America in the bottom quarter of the 28-country index.
Edelman said the collapse of trust in the U.S. is largely due to a staggering lack of faith in government. According to Edelman’s survey, which has been published every year since 2001, trust in government fell 14 points to 33 percent among the general population and 30 points to 33 percent among the informed public. The three remaining institutions experienced trust declines of between 10 to 20 points.
What does Edelman’s CEO make of these alarming statistics? That the United States “is enduring an unprecedented crisis of trust,” said Richard Edelman. “This is the first time that a massive drop in trust has not been linked to a pressing economic issue or catastrophe like the Fukushima nuclear disaster. In fact, it’s the ultimate irony that it’s happening at a time of prosperity, with the stock market and employment rates in the U.S., at record highs. The root cause of this fall is the lack of objective facts and rational discourse.”
Amidst this ugly picture, you might be wondering how it’s possible to run a financial-services business when the public is in such a distrusting mood? Actually, the trust gap may be an opportunity in disguise for financial professionals. Here’s why:
- First, the more people lack faith in their institutions, the more they yearn for a financial professional in whom they can place their trust. If they find such a person (hopefully you.), they will likely be thrilled to be working with that individual and to establish a strong and lasting bond.
- Second, once clients form a trusting relationship in these distrusting times, they’re likely to give their advisor a wide latitude when it comes to accepting his or her financial recommendations. As a result, trusted advisors will enjoy customer interactions with fewer objections and detours—in short, less sales friction—than poorly trusted advisors do.
- Third, trusted advisors will likely experience higher numbers of referrals from their customers, which will reduce their client acquisition expense substantially.
- Fourth and finally, if their clients trust them, they will have less difficulty making cross sales of related products to them. This will increase their revenue per client and have a huge impact on the overall profitability of their firms.
Still, it’s important to remember that even though the external climate of mistrust makes it easier for advisors to reap the benefits of being trusted, it’s still important to create trust in the first place. How? By focusing on five key customer outcomes: credibility, reliability, client focus, transparency, and fiduciary responsibility.
We’ll discuss each of those in greater detail in Part 2 of this series.
For information on affordable E&O insurance for low-risk insurance agents, investment advisors, and real estate broker/owners, please visit EOforLess.com. For information on ethical sales practices, please visit the National Ethics Association’s Ethics Center.