I recently finished reading Talking to Strangers by Malcolm Gladwell . More accurately, I devoured Talking to Strangers. The subtitle of the book is “What we should know about people we don’t know.” It is a thoughtful and objective look at how bad people are at judging others and what the consequences of that flaw may be. Topics of the book include how poor we are at gauging another person’s honesty and how likely we are to believe someone who is lying to us.Talking to Strangers is the latest in a mountain of content that I have consumed on the topic of trust. I have met my share of untrustworthy individuals over my career, and I admit that they can be very difficult to distinguish from honest and caring professionals. In the investment industry, where trust is foundational to every relationship, it is critical that a client chooses the right people to trust. I feel that it is my duty to not only protect the investing public from bad actors, but to also help them learn to tell the difference. The topic of why we trust who we trust is something I obsess over.
Here are some tips on distinguishing the trustworthy from the untrustworthy, or the caring professionals from the impostors:
1. Someone who always speaks with 100% certainty may be an impostor.
In Steven Pressfield’s The War of Art, the author describes how doubt inevitably creeps into the mind of every professional who truly cares about the work that they do. The professional worries about the quality of their work and the value received by their clients. The impostor never has self-doubt, since authentic caring is a prerequisite to such doubt.
This lack of doubt may be a symptom of a general lack of humility, and this could be dangerous. An impostor may confidently give an inaccurate answer, if they are too insecure to say, “I don’t know, but I’ll look into it.” A person who thinks they “know it all”, may have simply stopped learning. A caring professional understands that no single person has a monopoly on good ideas. They know that sometimes the best immediate answer is “I’d be happy to do some more research on the topic.”
To be humble means not feeling the need to claim every bit of glory or credit for oneself. impostors have an amazing aptitude for believing that all good outcomes come from themselves. It is as if their self-image would somehow be injured by saying, “I had the advantage of some good fortune (or timing, market conditions, team members, family connections…)”. The authentic professional will not only accept that they don’t deserve all of the credit, but will show genuine gratitude for any help they had along the way.
2. An impostor will make sure to “check every box.”
When I was a child, I had a world-class pirate costume that I wore for Halloween. Everyone knew right away that I was a pirate. I had the hat, the sword, the eye-patch, a parrot on my shoulder and even a hook for a hand! Of course, I was not really a pirate. I was pretending to be a pirate. No real pirate would display all of the features that I wore so proudly. The only person who would “check every box” on the pirate checklist is an impostor who desperately wanted everyone to recognize him right away as a pirate. This type of instant recognition is very important to an impostor.The investing public is becoming aware of a few ways to increase the odds that their chosen professional is one who will truly look after their best interests. Questions they are told to ask include:
- Are you a fiduciary?
- Are you fee based (as opposed to being paid by commissions)?
- Are you a CFP® Professional?
- Beyond these direct questions, there are less concrete signals that society has taught us to seek such as an expensive suit, or a fancy office with an exotic car parked outside.
This is where things get tricky. A person can meet every one of these criteria and still treat people dishonestly? In fact, an impostor may be the most likely person to try to “check every box.” (In the interest of full disclosure, I am fee-based CFP® Professional who is held to a fiduciary standard in all of my business activities... but I very rarely wear suits ). Beware of someone who is trying a bit too hard to seem trustworthy. Are they overly concerned with the image they are putting forward? Do they boast an absurd number of obscure “credentials”? These may be the markings of an impostor who is very committed to their costume.
3. Impostors have a flexible relationship with the truth
I once knew an advisor who loved to tell people about the results of a survey of his clients. He boasted that 100% of those surveyed responded that they considered him to be “trustworthy”. What he consistently failed to mention is that fewer than 25 of his over 300 clients ever received the survey and he personally chose which ones participated! Was this man lying when he boasted about his “perfect score?” Failing to mention that he cherry picked less than 10% of his clients to take the survey was an act of dishonesty.This type of deceit is well in the comfort zone of the impostor. The choice between truth and lies is a binary one. Embellishments, exaggerations, lies of omission, and “little white lies,” are all still acts of deception. The impostor can lie to anyone with ease, including himself. Being able to spot the lessor deceptions may help you to avoid the larger ones.Conclusion
If Talking to Strangers taught me one thing, it is that we are incurably bad at knowing when we are facing a dishonest person. This includes people whose very profession involves determining the truth, like law enforcement officers, judges, and CIA analysts. If this is the case, then what chance do you and I have to tell the difference between the universe of caring professionals and the handful of swindlers? While there is no perfect method for separating the two, these three warning signs may just help you to avoid placing your trust in the hands of a dangerous impostor.