"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." — Warren Buffett
In the case of PricewaterhouseCoopers LLP, 83-years of reputation-building took a serious hit when a representative from the firm mixed up the envelopes for best picture on Oscar night.
You might say, yeah, but the Academy Awards are a celebration of people who create make-believe worlds.
And I would say, why would I entrust someone with my taxes in the privacy of their offices when they can't get something right when 38 million people are watching?
The (dis)trust factor
I am not here to cast stones against PwC. People make mistakes. I get it. But this gives people another reason to distrust the financial services industry.
Let's face it, advisors don't need another hit. They need to build trust, not tear it down. And don't be naive enough to think that when PwC screws up on national television, it only makes PwC look bad.
Sure, they take the biggest hit, and rightly so. Their Oscar flub suggests, rightly or wrongly, that PwC can't be trusted with valuable information. But it doesn't stop there. It also plants a seed that financial firms, and financial representatives, can't be trusted either.
Can you trust me now?
Paul Marcarelli, the bespectacled former Verizon pitchman used to ask infinitum, can you hear me now? Paul, as you might know, now pitches the wares of Verizon's competitor, Sprint. I realize he's an actor, but really, are we supposed to trust him now?
What's next? Is Flo, from the Progressive commercials now going to jump ship and pitch Allstate or Geico?
While I'm making light of Paul Marcarelli's turncoat ways, trust is a serious issue in our society, an issue that deserves closer scrutiny if we're going to solve it.
Financial services isn't the only industry under the microscope. (Photo: iStock)
Fake news
Media is another industry that's the object of constant scorn, often for good reason.
When I was growing up in the '70s, "fake news" was the domain of The National Enquirer and others of its ilk. When I ventured to the local pharmacy once a month to buy Spiderman and Captain America comic books, I often wound up hypnotized by the outrageous headlines from the tabloid mags: "Bigfoot Kept Lumberjack as Love Slave"; "News Reporter Eaten Alive by 80-FT Dinosaur!"; "Christmas Miracle! Severed Leg Hops to Hospital!"
Now fake news has gone mainstream. Supposedly, CNN and The New York Times are among the news outlets that create fake news. In a February 17 post on Twitter, President Trump tweeted, "The FAKE NEWS media (failing @nytimes, @NBCNews, @ABC, @CBS, @CNN) is not my enemy, it is the enemy of the American People!"
Fake news has gotten Facebook in hot water. Fake news entered the presidential election. Fake news causes doubt.
Unlike the financial services industry, where rules apply and designations and licenses must be earned, anyone with a smartphone or a keyboard can become a news outlet, even if they're living and posting form their mom's basement.
With so much uncertainty in place, people are left to ask, who can I trust? For some, nobody. A persistent distrust of government bodies, financial institutions and the media, furthers the distance between those entities and the public.
As bad as all that sounds, it's not undoable. We can regain the public's trust. It will just take effort and time as we see in the following studies.
Boomers are skeptical of financial services professionals in the wake of the Great Recession. (Photo: iStock)
Lingering memories
A fascinating study by the Bankers Life Center for a Secure Retirement, examined the mindset of middle-income baby boomers and how they are recovering from the Great Recession. Many have lost faith in the system. They were diligent about saving for retirement, then their nest eggs took a beating when the markets crashed.
