Consumer trust can "breed arrogance" within organisations, the leader of the Question of Trust campaign told delegates at the IFP conference yesterday.
Shane Mullins, who is also director of Nottingham-based wealth managers the Fiscal Engineers, was chairing the conference's penultimate session, The question of trust and the pursuit of trusted adviser status.
His comment was a response to an audience member who asked whether it was right to try to foster trust within banks following the payment protection insurance (PPI) and LIBOR fixing scandals.
The Question of Trust campaign aims to improve trust across all sectors of the industry. Mullins conceded that the issue was not always straightforward.
"Trust is a thorny subject. It can be the case that consumer trust can breed arrogance within certain organsations.
"Actually, the regulator has told me privately that this is currently an issue it faces with building societies which benefit from higher levels of trust than banks for example.
"We need to be careful because we are treading a very thin line between delivering tremendous good and tremendous evil."
Despite this, the Question of Trust campaign, begun by Mullins in April this year, aims to increase consumer trust across the sector by looking at the methods firms can adopt to increase levels of engagement and foster better trust with their clients.
It has engaged with the Financial Services Authority and the Financial Services Research Forum (FSRF) amongst other institutions.
The campaign is currently developing a scale set for universal application to all financial firms aiming to help them increase engagement and trust.
But are there any tangible benefits to developing trust? Well as Mullins explained there is a really compelling business case for doing so.
He cited a study by Wetherill Consulting and sponsored by IBM which questioned 370 clients from 280 wealth management firms on the issue.
It found that the most trusted firms had seen a 26% greater share of revenue, 114% more referrals, 18% increased retention and five times as much profitability as their less trusted counterparts.
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