Trust is critical to any relationship, particularly in the pensions market. To be successful it is not enough just to be an expert. Other people must trust that you will use your expertise to help them. Here we explore the components of trust and what pension professionals, and trustees in particular, can do to build stronger trust-based relationships with employers and scheme members.
When members pay in to a pension scheme, they are trusting that the fund will support them decades in the future. When employers pay in, they are trusting that the scheme will look after their workers’ future interests and honour their responsibilities.
Members trust you to invest their hard-earned money, in good faith that this investment will support them at a time when they are more vulnerable; a time when through old age or infirmity they may be unable to work anymore or, at least, will no longer want to. After many years of working in the industry, it is sometimes easy to forget what a big ask this is.
As such, it is so important that we are trusted as a profession and as individuals.
Recent high-profile misuses of pension funds, at Carillion and BHS for example, have eroded some public trust in the pensions market. So how can we restore and increase consumer trust?
In part, this needs to be done industry-wide and this is a key focus for the regulator and professional bodies like the PMI. However, pension professionals should look to go far further that the standards set by the regulator both as a point of professional pride and to secure a competitive edge over their rivals.
So, what can you do increase trust? How can you develop your reputation as a trusted professional?
In their highly respected book ‘The Trusted Advisor’, David Maister, Charles Green and Robert Galford argue that the key to professional success is the ability to earn the trust and confidence of your clients. They suggest that there are four primary components of trustworthiness and show how these interrelate in The Trust Equation:
In other words, in order to inspire trust and be trusted, you need to demonstrate that you are credible and reliable. You also need to be able to build a connection with the other person to enable you to share concerns and ideas; the intimacy part of the equation. To build trust, you should look to increase your credibility, reliability and intimacy. At the same time you need to reduce your self-orientation. Put simply, you need to be there for them, not for you. You need to demonstrate that your focus is on the other party; on the members, the employer, your client, not your own interests.
So, let’s examine each of these in turn and how they can apply in the pensions market.
Credibility is about ensuring people have confidence in your words; ensuring that a member or employer can say ‘I trust what she says about my pension fund; he knows what he’s talking about.’
Most professionals will be confident in their credibility. The qualifications required by the regulator, your membership of professional bodies like the PMI, and your years of experience, all indicate that you have the expertise and experience to be credible.
Yet having this knowledge and experience is not enough. You need to communicate and demonstrate this to members and employers.
Think about experts in other industries who you believe are credible. Is your belief based purely on the strength of their CV? Or is it a result of how they act and behave, and on how they demonstrate and use this expertise?
Those outside our industry may be unaware of the latest regulations and protections in place. They may not have heard of your qualification or be aware of what it represents. Make sure you are prepared to illustrate and demonstrate your expertise.
Reliability is about ensuring your actions meet your words. It is about ensuring that you fulfil your promises. That, for example, an employer can say ‘I can trust him to run my company pension scheme efficiently’, or even, ‘I have confidence that he will challenge me, if I make a decision that will negatively affect our pension scheme.’
Reliability is strongly linked to consistency. Now, with any long-term investment, reliability cannot always be seen in the short-term. For example, typically investments will not always rise, month on month. Ensure this is not just explained but understood, so that as and when it does happen, such an event does not impact on how you are perceived.
However, we are not simply talking about the reliability of the pension fund. This is about you. Make sure that you are aware of how other, softer factors affect peoples’ perception of your reliability. Your behaviours and actions are key here.
Perceptions of reliability are often linked to simple things, like how quickly you respond to an email. Make sure you don’t forget the basics.
Intimacy is about getting closer and understanding your client on an emotional level, so that you can have an open and honest discussion. It’s about ensuring that, for example, an employer can say ‘I feel comfortable discussing my company’s financial pressures with her and how this effects our pension scheme.’
It is easy to miss intimacy and to simply be perceived as a technician; to immerse yourself in the facts and figures. This can be a mistake. Pensions are a highly emotive business that go well beyond logic. Your decisions and recommendations affect how people live. To trust you, people need to see that you recognise this.
All pension professionals, but notably Professional Trustees, are required to challenge decisions, negotiate and influence. It is much easier to persuade and influence if you have an emotional connection; if you have built a relationship with the employer. Your advice is more likely to be listened to and acted upon if employers feel you understand their business, the other pressures they face, and what they are trying to achieve.
Self-Orientation is about demonstrating your motives. It is about providing members and employers with the confidence that you have their interests at heart. Ensuring that, for example, a member can say ‘I can trust that he cares about my interests and is committed to ensuring the scheme will support me and my family when we need it most.’
Be friendly and conversational. Listen and respond to the concerns of members, employees and other trustees. Be interested. Make the employers’ and members’ concerns your concerns. Ensure the members, in particular, know you are there to protect their interests.