Building trust

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• Building trust using the power of networks
• Lessons from the first 1000 days of a black
  investment manager in South Africa
• Mothobi Seseli
• MA. Econ (Econometrics), IODSA Cert Dir.
• Managing Director

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Talk agenda

1. What is trust ?
2. About my organization
3. Building a trusted presence

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What is trust ?

• Relationship of reliance
• (Source Wikipedia)
• Complete confidence in a person or plan be
  confident about something, certainty based on
  past experience, to show confidence in a person
  by entrusting (him) with something.
• Assured anticipation dependence upon something
  future or contingent, as if present or actual
  hope belief, Assured resting of the mind on the
  integrity, veracity, justice, friendship, or
  other sound principle, of another person
  confidence reliance
• (Source Arc dictionary free online dictionary)

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Who can we trust ? or who do we trust ?
Who do we develop easier functional trust based
relationships with?

• Those similar to us, generally
• Those we know well maybe family friends
• Those we share something in common with e.g.
  grew up together
• RSA (perhaps unique) - from overseas the
  developed world, for e.g. USA, UK
• Well developed brands

Is this always the case ? Maybe ? Do these always
serve you well ? Or not ? e.g. Tannenbaum scandal
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Butdoes trust matter ?
Source Edelman Trust Barometer
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About my organization

• The picture / long term goal / take advantage
  of opportunities
• positive role modelling / serve clients well /
  create relevant investment products / create
  wealth / a different spin on transformation
• Great team (education experience), sound
  investment process risk management
• Our values thoroughness, reliability,
  honesty, integrity, respect for self others
  and good ethics.

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About the Asset Management Industry the Manager
Universe
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What have the challenges been ?

• Limited product track record
• Consultant endorsement
• Market resistance / inertia new company
• Poor brand awareness / reputation
• Lack of large financial resources relative to
  established competitors
• Very hands off approach in most quarters - GT
  Ferreiras story
• Stereotyping - what do you know about money
  management
• Size of opportunities tend to be smaller
• Mistrust
• Relationships networks

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Have we been successful?
We have had moderate success and are going to be
more successful going forward! April 2005 Zero
clients, zero clients assets under management 6
staff members June 2006 Some 35 client
mandates, gtZAR 6bn in AUM 15 staff
members Moderate initial success Legal
compliance Education and experience of team
members Strong BEE credentials Reputations of
certain team members Good product
There are many moving parts
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How are we developing trust ?

• Commit to a plan execute it!
• Two powerful stories / messages
• 1) Build brand awareness Embracing media - radio
  / print examples
• 2) Living your values - turned client business
  opportunity down this has become my
  fiercest supporter to date
• 3) Community responsibility - critical empathy
• 4) Presence at industry fora - interact with
  decision makers, build a reputation and seek
• to influence perception because this is
  key
• 5) Building a network Socials and professional
  gatherings with different stakeholdersWork
  at creating enough shared experiences to
  inform otherwise
• 6) Regular communication

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Building trust (contd)

• Trust is multi dimensional, which dimension do
  you focus on ?
• What are the critical issues in building trust
  ?
• (Source M Pirson D. Malhotra, unconventional
  insights for managing stakeholder trust, 2008
  Harvard Business School working paper)
• 1) express genuine concern for your well-being
• 2) you are trusted because of competence
• (managerial effectiveness technical
  competence)
• 3) value congruence
• 4) perceived as having integrity
• 5) transparency

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Media.February 2007
Source The Sowetan, Argon Asset Management
website
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Thinking about Communicating ?
Source Edelman Trust Barometer
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What about reputation ? In todays world
perception is reality

• Fund managers can no longer rely on we build it
  and they will come there is a need to be more
  customer-driven
• Third party distribution also suggests the
  importance of branding to both distributors and
  end-users.

1999 total return for a representative
sample of the companys funds, as measure against
other funds with similar strategies, using
asset - weighted figures Based on survey of
4,700 U.S. households conducted by Financial
Research Corporation and Market Facts, Inc.
The gap between awareness and reputation causes
brands to be weak!
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More about reputation what impacts on it ?
Source Edelman Trust Barometer
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Interesting insight ?........
Source Edelman Trust Barometer
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In concluding..

1. How does business take these lessons forward ?
   question our views and their underpins more, seek
   to challenge those convenient truths we have /
   hold, sincerity in our engagements better
   emotional intelligence
2. Ultimately the organizations that succeed are
   those that manage their stakeholders effectively
   and from positions that are compliant with their
   value systems.
3. Self mastery / comprehension is vital - be
   absolutely clear about you, your passions, your
   interests Recognize your limitations and work
   at them. Seek to develop your own unique value
   proposition which influences your competitive
   advantage.
4. Identify champions and trigger pullers - those
   that will champion your cause.
5. Your values are critical, they anchor you
6. Engage, create the shared experiences that
   hopefully derisk you and make you human