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The relationship of trust is the basis of financial advice

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The relationship of trust is the basis of financial advice

by Marco Tofanelli, general secretary of Assoreti

From the confidence you can’t do without. We have experienced this several times in this particular period. And we have learned to associate the concept of trust with the concept of credibility and of authority.

But when we talk about protection of the saver the discussion essentially concerns the regulatory framework and the protection model. Given that the relationship that is created is attributable to the giving of current money against the expectation of future money, the feasibility of the exchange definitely depends both on the functioning of the market and on the concrete situation of the financial operator.

Therefore, the relevant information asymmetries that characterize it could, in the absence of authoritatively imposed corrective factors, make it inefficient and make it fail. The market, therefore, must be regulated.

Over time, it was considered that legislation based only on disclosure transparency obligations was not sufficient to achieve an effective one investor protection. Thus the legislators and especially the regulators have increasingly felt attracted to a sort of Bismarckian paternalism and, opting for the limitation of the investor’s freedom of choice, have succumbed to the temptation to create a hierarchy of preferences, assuming that those of the saver were by definition imperfect and that, probably, he was also unaware of his imperfections, thus relegating him to a limbo of financial ignorance. Until then, by declining everything and its opposite, it was argued that the protection of savings could not be separated fromfinancial education. Giusto, the first defense of self-protection; wrong because it is certainly not possible to surreptitiously recall its responsibility in taking risk choices.

Respect for trust

In fact, as he remembers Renato Rordorf – former deputy president of the Court of Cassation – it is very problematic to define the right balance between the concern not to jam the intrinsic mechanisms of market development and the need to protect savings preventing it from being abused. I believe that even before the normative discipline it must not be forgotten that all positions must be brought back, actions oriented and all results judged to the respect of a serious feeling: trust, whose weight has grown profoundly over the centuries and affects people a lot. , first of all as individuals. And, apologizing for the digression right now, I don’t mind identifying aspects of it (taken from a study by Bianchi / Liani, Quaderni di Sociologia, 2017) capable, I hope, of arousing reflection.

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The evolution of society over the centuries has greatly increased the need for trust. If once the stranger was external to the host community, and for this reason he did not deserve personal trust, in the modern one the multiplication of relationships has led to the development of an a priori trust, necessary to carry out daily life.

The English sociologist Anthony Giddens it clearly reveals how personal trust is essential for people to acquire one ontological security: it is the sense of reliability of people and things that allows us not to continually question ourselves.

Like personal trust, that towards abstract systems has also profoundly evolved. The weight of trust in our choices e daily assessments has grown a lot, and it is extremely evident if we only reflect on our daily lives: from the use of means of transport, to purchases, to the simple handshake. Giving and gaining trust are necessary processes that allow us to simplify our interactions with our surroundings and reduce the complexity of the world around us.
Trust indeed plays an important role in maintaining a balance between knowledge and ignorance, allowing us to act even where we do not fully know the situations in which we find ourselves. Niklas Luhmann, another eminent sociologist, represents how systemic trust is based on the certainty that the system works, a certainty that is achieved only after repeated positive experiences of interaction with it.

The trust of the saver

Following a survey carried out by Eumetra even before the various pandemic phases followed one another, it emerged that 95% of Italians were fully aware of the contribution of finance to economic progress and consultancy, in particular, as a driving force for growth and recovery.
Consistent with this new bestowal of trust by the saver, from the first months of 2020 to September of last year (the most recent data at the time of writing the article) theconsulting industry gathered in Assoreti saw assets increase from 570 to around 760 billion euros and customer families to almost 5 million, with constant liquidity of around 16% and diversification oriented to medium-long term investment (70% is in managed savings) thus obtaining, month after month, a growth of approximately 33% in assets, of which almost 50% due to a market effect. These are numbers that seem to repay the trust given.
And in addition to these, it should also be noted how the daily presence of the financial consultant alongside the saver today elevates the profession to a role not only of guidance, but also of primary reference to financial education that has the ability to correctly orient investments, for the benefit of the Italians and therefore of the entire system.

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This industry, in the relationships of personal trust with the consultant and in the abstract ones towards the intermediary, well fulfilled, translates savings into healthy investments, supporting the recovery of the Italian economy. In doing so, in addition to counting on the continuity of a model that has proved its efficiency over the decades, it constantly evolves responding to emerging needs thanks to a continuous effort to update, train and listen to needshaving by now fully aware of how much sustainability and digitalization – hand in hand – are fundamental for the new economic course, and without forgetting the imminent opening of the system to a generational change that will certainly have an important weight in the construction of recovery plans of the Italian investment.

The president of Consob Paolo Savonain a recent speech, he admonished “generate trust!”, Recalling the utility function of the saver, dear to the microeconomics. Generating trust, maintaining it over time, is a task that no industry, no single operator can escape from, having to guarantee citizens social, environmental and corporate governance approach criteria, respectful of the new generations.

To conclude with Georg Simmel, another sociologist, trust, as a hypothesis of future behavior safe enough to be able to act, is an intermediate stage between relative knowledge and ignorance and is connoted as suspension of judgment. Risk is the bridge we cross whenever we decide to rely on trust in our relationships.
Let’s keep it solid, therefore, because the present and future well-being of our society depends a lot on it.

The full article was published in the January 2022 issue of Wall Street Italia magazine.

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