A crisis occurs when there’s an erosion of trust as a result of poor leadership, stewardship, and governance.
The pandemic, the precipitous drop in the stock market, and the protests: What do these three crises share in common?
The answer: conditions have been made worse by the erosion of trust. Indeed, trust is the first casualty of any crisis.
Given the events of the last four months, do you still think your purpose in life is to peddle fiduciary, fees and funds? Are you concerned that the notion of a secure retirement—of a secure future—also may become a casualty for many of the people you serve?
You may be feeling the need to find a role in the lives of your clients that has more meaning—more gravitas. If so, understand that in order to be successful, others must see that your actions flow from a place of integrity and an authentic sense of purpose.
We would suggest that you become the leader, steward, and courageous decision-maker that your clients are desperately seeking.
In order to lead, you’ll have to demonstrate your capacity to inspire and engage others. Your clients will need to see that you’re compassionate, character-full, and competent – the same behaviors that are critical to the formation of trust. In fact, leadership and trust are inextricably linked: trust is at the very core of great leadership. You can’t inspire or engage others if people don’t trust you.
To be regarded as a great steward, you’ll have to demonstrate that you’re passionate and disciplined about protecting the long-term interests of others. Clients will need to see that you’re aligned, accountable, and attentive to their needs.
And to be recognized as a great governor, you’ll have to demonstrate your ability to manage the details of a prudent decision-making process. Good governance improves transparency, which also is a factor in building trust. More importantly, good governance demonstrates your capacity to bring clarity to what appears to be total chaos.
Where does fiduciary fit in?
Fiduciary by definition is a relationship based on trust—or, at least, it should be.
With the original fiduciary movement (1985 – 2010), trust was baked in to the very essence of fiduciary. However, the fiduciary standards that will become effective at the end of this month are based on the presupposition that you cannot be trusted. Hence, the reason for complex, rigorously scripted disclosures.
The new rules-based fiduciary standards also are not conducive to the development of good leadership, stewardship, and governance. We will not be able to restore retirement or financial security if we allow ourselves to be hemmed in and bound by new fiduciary standards.
To end the erosion of trust, we’re going to have to place an even greater emphasis on training leaders and stewards who are capable of serving in critical decision-making roles. Of course, this is true for every industry, sector, and domain; not just the retirement industry.
During this time of crises, no one is looking for a fiduciary …they’re looking for leaders and stewards.
Don Trone is regarded as the ‘Father of Fiduciary’. He is the CEO and co-founder of 3ethos and the CEO and one of the co-founders of the Center for Board Certified Fiduciaries which is affiliated with the Wake Forest University School of Professional Studies. CBCF is the only organization offering graduate-level training in the leadership and stewardship roles of fiduciaries.
