Over the past 27 years, I’ve watched the financial industry struggle with a system and process to engage and advise consumers in their money management. My work has focused on that challenge by trying to give investors their unique voice and tools for advisers to interpret those voices – spoken or unspoken. My first institutional presentation in 1983 was to the Securities Industry Association Board with its title, “Transforming Client Relationships from Product-driven to Client-oriented”. While I received high marks for style, the subject matter was considered too ideological, irrelevant and impractical based on feedback from members afterwards.

Here we are 27 years later and the subject matter is more relevant than ever but would the audience still feel my message was impractical for an industry built on product quotas and commissions based on results of sales of their products? I totally understand the system and its short-term benefits for business and individual profits, but I don’t understand how the industry I’ve come to know over the past dozens of years could be in such denial of the long-term implications for engendering the trust and allegiance of clients and potential clients.

My spirits were elevated this morning when I tuned into NPR, my morning wake-up call. What I heard was not only an excellent summary of the crisis of trust we’re experiencing in our financial institutions, but an attempt to design mutually beneficial solutions which a key leader of the financial industry is recommending.

Headlines are constant reminders that our crisis of institutional distrust is warranted especially with the tangible evidence of bank bailouts, executive bonuses, and record profits. It’s very difficult to find a reason to trust again in such circumstances.

But it’s an argument that Stephen Green, chairman of HSBC – one of the biggest banks in the world – makes in his new book about banking: Good Value: Reflections on Money, Morality and an Uncertain World http://www.npr.org/templates/story/php?storyId=1033

Green is also an ordained priest in the Church of England. In his book, he proposes a “new capitalism” that brings good business and good ethics together. He says moral and spiritual values should take precedence over immediate profit.

Green states that the imbalance was caused by emerging markets in places like Asia that were exporting, saving too much money and spending too little domestically. Then, consuming nations like the United States and the U.K. were spending too much and saving too little. In that context, there was a pervasive atmosphere, he says, where institutions didn’t ask a lot of questions about what was the suitable, fair or right thing to do, provided that they found a legal market for the financial product they were offering.

“When you look at the compensation practices in the financial industry there were clearly distortions,” Green says. He adds that it is “entirely understandable” that there’s widespread public anger over executive pay, especially in cases of companies that collapsed.

Perhaps if the message is delivered by a colleague and leader in the financial industry, it will be considered more practical and worthy of a valuable consideration to transform the future sales process of financial products and compensation for financial professionals.

Copyright 2010  Kathleen Gurney.Ph.D.