In today’s article I choose to speak about ‘Trust’ in business relationships, and how relevant it is in personal growth from a personal experience. Trust is a strategically critical issue in any type of relationship, because a relationship without trust is not really a relationship at all. Over the long-term, business success is dependent upon a network of positive relationships. Trust is invariably the critical component in enhancing business relationships, and hence must be accorded the highest respect.
In the world of business today, trust is more important than ever – especially when it comes to relationships with investors, since they will be same people to give positive referrals to enhance a portfolio.
Trust is like an elevator cable, in that only its absence should be remarkable. Trust between investor and broker isn’t something you must only ‘build’; it’s something you first earn, then maintain and preserve. Saying you can ‘build’ trust implies that you can move from a position in which an investor doesn’t have faith in your ability to deliver, to a position where the investor does.
In trading activities you ought to know that your client trusts you implicitly, or they wouldn’t have chosen to do business with you in the first place. There aren’t degrees of trust – at least not between business entities. Either clients trust you or they do not, or they don’t have enough information available by which to make a decision. If they do trust you, the only thing that will keep them trusting – and keep them as your client – is repeated on-time and on-report delivery of a satisfactory service.
The easiest way to compromise that trust is by, of course, providing something less than what your clients have become accustomed to. On the other hand, you can compromise this trust by attempting to mutate your professional relationship into something more personal.
Some people like to argue that it’s best to treat clients “in the way you’d like to be treated – like family”, as if the phrases on either side of that dash were somehow synonymous. From at least one reasoned perspective, there isn’t a more dangerous way in which to conduct business.
For the most part, your clients could not be less interested in the details of your life. Nor do you need to share with them your dreams and aspirations. Doing so is an act of brazen selfishness, and the very inverse of the axiom that the client ought to be your focus.
Maybe your intentions are explicit, or at least clear, and having a personal relationship with the client is more important to you than making money could be. There’s nothing wrong with that in and of itself, as long as you understand that any fruitful personal relationship could hamper the business one. However, if that’s not the case, save yourself the trouble and keep things nice and clean.
So, as a trader, what should you do if you find yourself in the middle of a crisis of trust? These three steps will help put you on the right track toward mending your reputation and strengthening relationships with your investor.
Set aside your pride and bite the bullet: the first and most important step to rebuilding trust is owning up to mistakes. Pairing genuine humility with an honest and frank discussion with the affected investor will help lay the foundation for repairing a business relationship.
In addition to owning your actions, explaining the logic behind them no matter how misguided or embarrassing it may seem in hindsight will help frame the circumstances of the situation. Then, open the floor to conversation about what led up to the unfortunate event to help pinpoint where things went wrong.
The next step is to put an action-plan in place to undo the damage that has been done as quickly and efficiently as possible. Again, this is a time to lay all your cards on the table and take an honest look at the situation in order to forge the best path forward.
Learn from it
Once the issue has been acknowledged and resolved to everyone’s satisfaction, the final step is to put procedures in place to ensure the issue doesn’t rear its head again in the future, or as a safeguard for other investors and traders who may find themselves in a similar situation.
Remember, these three steps are just the beginning of the process. Rebuilding trust is an ongoing commitment that takes time and dedication to mending relationships before your reputation is fully restored. But, a focus on accountability, action, and learning is always a great place to start.
I found that trust remains the most important element of investors’ relationships with their broker. Deeper trust can lead to greater client loyalty, increased referrals, and favourable business outcomes such as client growth.
There are some basic major components of trust when it comes to investor-broker relationships
Functional trust is described as an investors’ confidence in their broker’s credentials and skills, and in the day-to-day operation of their investors’ trade. Brokers can establish functional trust by presenting their industry qualifications, creating and executing trading strategic plans, and being proactive with investors’ communications.
Emotional trust is summarised as the intangible aspects of the relationship between the investor and the broker that bring about positive feelings or sensibilities to the investor. Examples of emotional trust are investors saying the broker is “my advocate”, “provides a sense of relief”, and “makes me feel my account is important”.
Ethical trust involves broker trading practices or behaviours that are consistent with all trading set expectations of correct conduct. The absence of a conflict of interest and acting in the best interests of investor are examples of ethical trust.
I firmly believe that trust is right at the foundation of the survival and success of any business and/or positive relationship. Without trust, there can be no sustainable business.
Trust is a strategically critical issue in any type of relationship, because a relationship without trust is not really a relationship at all. Over the long-term, business success is dependent upon a network of positive relationships.
Trust is invariably the critical component in enhancing business relationships. The moment a broker is not trusted by any investor, his chances for success within trading activities are dramatically diminished.
Working relationships that have been built on trust are an important sustainable competitive advantage because trust is so valuable and so rare. The level of trust a broker is able to achieve with his trading skills is contingent upon the broker’s ability, honesty and integrity with his investor.
There are certain components of trust that every investor looks for in brokers before doing business with you. There are several levels of trust, and I have chosen five for this article.
The first level of trust is trust in technical competence and know-how. Investors and interested parties in forex trade are looking for someone whose level of competence inspires trust.
A statement such as “Just trust me!” is woefully inadequate in today’s world. There is an obligation and a duty for you to provide explanations that are clear and concise, and not overly-simplistic.
The second level of trust is trust in ethical conduct and character. Your reputation is paramount, and your honesty and integrity must be impeccable.
The third level of trust is in your interpersonal skills and relationship with investors. You must ensure that your investors believe that if they tell you something about themselves, their business or any sensitive information, you will handle it with the utmost respect and confidentiality – and do exactly what is in accordance with the investors interest.
The fourth level of trust is being transparent and open in your business relationship. A lack of transparency will make you much more vulnerable to damaging your business relationship with investors.
The fifth level of trust is being a ‘person of your word’ and holding yourself accountable in all actions within your business relationships to your investor.
The strategic question we all need to ask is: how many levels of trust have we established with our investors in our trading activities or businesses?
Trust is one of the most essential components of a strong relationship with your investor, whether personal or professional. The trouble is it takes time to build trust. And once it’s lost, it takes even longer to rebuild it.
When trust is broken in a trading activity, especially with your investor, it can have devastating consequences for your career. You can find yourself held back, undermined and even slowly pushed out.
You can lose your investor’s trust for a variety of reasons, both big and small. It can happen when you fail to follow-through on a promise so that an important deadline is missed, or a critical task falls through the cracks. It can even happen when you do something totally unacceptable, like not adhering to your investor’s instructions.
Regardless of how it happened, if you want to get your relationship back on track you need to take some concrete steps to rebuild trust. Here are some recommendations to help you.
Articulate Your Goal
Communication is a key aspect of trust, so start by talking with your investor. It can be helpful to clearly articulate the problem and your desire to resolve it. For example, you might say something like this: “I realise we’ve had some challenges recently, and I want you to know that I’m committed to regaining your trust”.
If a specific situation has contributed to the problem, you may wish to discuss the lessons you’ve learned and how you’re planning to implement them moving forward. For example, imagine your actions led to the loss of a key account for your trade. Now, your investor appears skeptical of you – and rightly so. It may be useful to say something like this: “I’ve spent a lot of time evaluating my actions, and here’s my plan to ensure this doesn’t happen again”.
Follow Through on Promises
Broken promises are the easiest way to destroy trust. If your words aren’t followed with action, they become meaningless. Therefore, if you’re trying to regain trust, you must make sure that you follow through on any and all promises with your investor.
If you’re unable to follow through on something you said you would for reasons outside of your control, address it immediately to prevent damage. This lets your investor know that you’re aware of the situation, you’re not hiding from it and you’re doing your best to make it right.
Practice Selfless Behaviour
One way to build trust with your investor is through sacrificing something of yourself for the good of the trade and trust. Whether that means staying late to finish a trade options or taking on an extra job in recouping lost funds, your investor will recognise and appreciate the selfless act.
Show your investor, through your actions, that you’re really committed to their vision and willing to do what it takes (even when it’s hard) to bring it to fruition.
Give It Time
When trust is broken because of a simple, one-time mistake, it can often be repaired quite quickly. However, when the cause is repeated mistakes or questionable competence or large lapses in judgment, it can take much longer. So, be patient and give yourself time to establish a new footing.
Also, remember that consistency is absolutely essential for rebuilding trust. All too often, people start off with a bang when they recognise the need to rebuild trust and dramatically improve their behaviour. But then, they slowly sink back into their old ways over time. This can backfire severely.
In order to truly rebuild trust, you need to set a new-track record for yourself. This only happens with consistent action. Over time, your investor will gain a new appreciation for you.
Work hard – really hard
If you’ve been cutting corners, Stop! Stay late. Do the extra work to trade more. Over time, this will become investors’ more recent impression of you – not your mistake. Plus, your investor will see that you’re working hard and assume it’s an attempt to get past the mistake – which he’ll appreciate.
Trust can, indeed, be regained – but don’t expect it to be an overnight matter