Ethics Center: Sales & Marketing

U.S. Experiences Epic Trust Drop: How to Capitalize On It, Part 2

In Part 1 of this series, we revealed that public trust has cratered in the United States, indicated by a historic drop in the Edelman Trust Barometer. According to the Edelman Trust Index, the level of trust among informed U.S. consumers dropped 22 points in 2017, dropping America to last place among the 28 countries surveyed.           

In the article, we went on to discuss why this happened and how it represents a huge opportunity for financial professionals to reap the benefits of reinstated trust. But to do so, they must first master what author and consultant Charles H. Green called “The Trust Equation.”

In his now classic book, “The Trusted Advisor,” which he co-wrote with David Maister and Robert M. Galford, Green broke trust into its component parts and described how they fit into a trust equation. By understanding where trust comes from, Green said service providers could improve their own trust quotient.

So how does the equation work? For Green, Trustworthiness equals Credibility plus Reliability plus Intimacy divided by Self-Orientation. Lets examine each element in turn.

Trustworthiness is self-evident. It refers to how much a prospect or customer trusts you as expressed in the speed with which he or she accepts your recommendation and acts upon it.

Credibility describes people’s reactions to your words and credentials. If they believe your claims about your expertise and proposed solution and like your track record, then you have established credibility with them.

Reliability refers to whether or not your actions are consistent with your claims. Do you deliver the benefits you promise? Do you complete your work when you say you will? Do the financial products and strategies you provide accomplish what you say they will? If consumers answer “yes,” your reliability in their eyes will be high. If not, it will be low.

Intimacy involves whether you share a lot of yourself with your customers and encourage your clients to do the same with you. If they feel safe opening up to you, it’s safe to assume your intimacy level is high.

Self-orientation is the only term in the denominator, referring to both an advisor’s desire to exclusively help a client vs. advance his own interests and the ability of the person to focus on and really hear a client's concerns.

As you consider all these terms, it’s apparent they fall into one of two categories. The first is quantitative or objective and the second is qualitative or subjective. Credibility and reliability happen when your performance is quantitatively or objectively strong. The client will reach this conclusion by using their reason. Intimacy and self-orientation happen when your performance is qualitatively or subjectively strong. People will make this determination by using their emotions.

The problem financial professionals have with trust building is they often focus more on building credibility and reliability—the rational factors in the trust equation— and focus less on creating intimacy and reducing self-orientation, the emotional factors. Yet it’s the heart that drives most financial decisions, playing a greater role in creating trusting relationships than do objective factors such as credibility and reliability.

To have a high degree of trustworthiness in your client relationships, you need to maximize the numerator value and minimize the denominator value. In other words, you need to hit your marks on objective measures of performance, while also striving to open yourself up emotionally, while making sure to sit on the same side of the table as your clients (figuratively).

For example, a financial advisor or insurance agent who really knows his or her product portfolio, but who comes across as cold and selfish will not develop trusting relationships. Conversely, a financial professional with good product knowledge, excellent intimacy, and a strong desire to put their clients’ needs ahead of their own will likely establish tremendous amounts of trust.

So how should you implement the trust equation in your own business? Here are some pointers to consider:

  • Think about all of your touch points with prospects and clients. Make sure your claims at each point are reasonable and that you follow through on all your promises.

  • Never exaggerate your capabilities or the features and benefits of your products. You will always establish more credibility by under-promising and over-delivering, not over-promising and under-delivering.

  • Don’t be afraid to open up personally to your clients by talking about your own financial challenges and being willing to address difficult client issues. The closer you are emotionally to your customers, the greater your trust quotient will be.

  • Always put your clients’ needs first. That means never being more concerned with your own issues than with theirs.

  • Be personable with your customers. In other words, try to maintain a friendly, caring relationship with them.      
  • Always encourage clients to do most of the talking by asking them open-ended questions. Avoid hogging the conversation.

In short, by mastering Charles H. Green’s Trust Equation, you will accelerate trust building and eliminate friction in the sales process. In this era of dwindling trust, we can’t think of a better approach to standing out from your competitors and having a more successful career. Good luck!

For information on affordable E&O insurance for low-risk insurance agents, investment advisors, and real estate broker/owners, please visit For information on ethical sales practices, please visit the National Ethics Association’s Ethics Center.