“Nobody cares how much you know, until they know how much you care” was the principle that supposedly guided Theodore Roosevelt’s public life. As historians rate him as one of the US’ most successful presidents, it seems to have served him well. Yet, reluctant as I am to correct someone who also counts a Nobel Peace Prize among his accolades, the phrase is not strictly true. Teddy should have preceded it with: “When risk is involved…”
The truth is that if I am not exposed to any loss, injury or harm from the actions of others, I’m not really bothered how much they care – they just need to show me what they know. In contrast, if I am vulnerable, it matters a great deal whether others care before I accept to place my fate in their hands. Am I choosing a dentist to clean my teeth or drill them? Am I choosing a colouring book for my toddler or a kindergarten? It makes a difference.
When it comes to money, this rule applies in the same way. Am I selecting an advisor to manage a tiny fraction of my wealth or all of it? Am I investing in a developed market equity index fund or an emerging market high-yield bond fund? It makes a difference.
If I don’t consider myself to be vulnerable to your actions, you’ll just need to show me that you know what you’re doing, or some cheap prices, and I’m in. But if I feel vulnerable, track records, awards or certifications will not be enough. * You’ll have to show me that you genuinely have my best interests at heart, otherwise I’m out.
In the book, The Trust Mandate, Herman Brodie and Klaus Harnack investigated the drivers of clients’ decisions to select and retain financial service providers. Indeed, the greater the risk for the client (financial, social, physical, etc.), the more service providers must demonstrate that they care before they can win business. The book therefore gives recommendations as to how businesses should ‘care’ and reveals the cues clients are sensitive to in their search for a caring financial service provider.
www.thetrustmandate.com for more information about the book and events.
*I concede that a few select firms, by nature of their brand, or because they are considered too-big-to-fail, seem to combine a reputation for being uncaring with high prices. In these cases, though, the brand or size has the effect of diminishing the perception of risk.