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The circle of trust

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As I write this – my last column – I’m flooded by memories of the state of the industry when I took this job in January 2008.

In short, the industry had a trust problem.

This was before the great market crash later that year. While the mainstream media would find a myriad of villains from the fallout of that catastrophe, they didn’t have their Bernie Madoff yet. Instead, they found their whipping boys in retirement advisors, particularly the ones who favored annuities as a safe product for aging Americans. 

Dateline NBC was figuratively at the doorstep when I started. My bosses pulled me in from day one and said, “They’re planning a story about annuity advisors. We don’t know what they’re going to say. We don’t know when it will air. We only know it won’t be flattering. For the sake of our industry and the advisors who are doing the right thing, we need to get out in front of this story.”

A day into this job, I didn’t know the advisors. I didn’t know the industry. I Googled “annuities” and didn’t like what I found. Story after story hammered annuity advisors, claiming they were “out to get grandma.”

Meet the Parents

In those early days, I tried to get my head around the trust problem. When I spoke to industry folks, they admitted that, “Yes, there are a few bad apples out there, but you have bad apples in any industry. The problem is the media makes headlines out of our bad apples.” 

I read past issues of our publication. The magazine did a great job of producing stories about successful advisors. These advisors had been vetted by Steve McCarty’s team at the National Ethics Association, who conducted background checks on our cover subjects.

Our guys were shiny red apples with great success stories to share with other advisors. And yet, amid all the rags to riches tales, there was something missing. The stories talked in great detail about the money top producers made, but they rarely spoke about trust.

In Meet the Parents, Jack Byrnes (played by Robert De Niro) talks often about “the circle of trust,” an unbreakable bond that binds loved ones together. When Byrnes becomes disappointed in his future son-in-law Greg Focker (Ben Stiller), he tells him in a threatening way, “I’m waaatching you!”

With the media plastering negative stories about annuity advisors – even if they only focused on the small sample size containing bad apples – consumers paid attention. They were wary of strangers with retirement promises. They were “watching you.” And what they were looking for was someone they could trust with their retirement money. 

The Mama Test

We decided we’d tweak our coverage of advisors. We’d continue to run success stories. We’d explain the strategies successful advisors used to win clients. With one very important addition – we’d also talk about trust, how it was gained, how it could be lost.

Oh, and we’d talk about the clients as well. With the advisor-client relationship, two parties are at stake and we’d hear about the client’s success story, too.

I added one more unscientific element to the process. Any advisor I wrote about had to pass “The Mama Test.” It goes like this. As I spoke to an advisor, I asked myself one and only one question: Would I want this person to handle my mama’s money

The Rule of 1
After the dust settled that first January, I had a conversation with an advisor who told me he planned to have 500 client meetings that year.

“How is that even possible?” I asked.

“It’s taken years,” he said, “And I never would have made it without gaining the trust of my clients who then are glad to give me referrals.”

“How’d you gain their trust?”

“One way is how I treat people in those client meetings. When someone walks through those doors that may be the only time they meet with a financial advisor all year. So it doesn’t matter if I have 50, 100 or 500 client meetings in a year. When they sit down across from me, I treat it like that meeting is the most important one I’ll ever have.”