Characteristics required of the financial manager: Honesty

Characteristics required of the financial manager: Honesty

Exactly a month ago we published a post about the main characteristics that we would require from a financial manager if we had 10 million euros (see link at the end). Today we are going to focus on the first one.

As one user very well indicated, it would be convenient to distinguish between trust and honesty.

All financial activities and services are based on the trust in the system. The confidence that we will be able to dispose of our savings when we go to withdraw them from the bank office, the confidence in the insurance coverage in the event of the insured loss or the confidence in the stock markets as mechanisms for fixing the price of the financial assets are just some examples of the fiduciary nature of the financial system in general.

On the other hand, when the most important financial crisis since the Great Depression of 1930 began in 2008, some banking entities adopted strategic decisions that seriously impaired one of their main assets: the honesty of your employees. They used them Machiavellically to commercialize toxic products that have blown up the savings of thousands of families. Hard-earned and long-term savings disappeared when it was discovered that they were not deposits but preferred shares, subordinated debt and other products with similar denominations.

Many of these employees have not yet recovered. They remain on leave or are early retired. They have lost their joy and hardly go out on the streets because they know that they betrayed those who trusted them. Others have bought into the arguments of their superiors and seem to be able to sleep at night because they have kept their jobs.

In Spain, the private banking client who has 10 million euros in the bank was not affected by these massive placements of toxic products, so the honesty of his interlocutor was not so affected during these years. But others were not so "lucky". In the United States, Bernard Madoff swindled large fortunes out of 50,000 million dollars.

I would like to end this post with some personal conclusions:

1. Personal values ​​should never be "sold". Pressures on employees to market garbage They were very big and all the middle managers obeyed blindly, but they are episodes that we should never forget. Neither the executors nor those affected.

2. In the sea there is always a bigger fish. America's great fortunes were swindled by Madoff as numerous European entities were by Lehman Brothers and similar entities.

3. The banking system You are very wrong if you think you will regain the trust of retail customers with a few publicity stunts and three or four photos with charities. The damage caused has been enormous and it's going to take years to regain the trust they shattered.

Topics related to Characteristics required of the financial manager: Honesty

  • Main characteristics that we would require from a financial manager if we had 10 million euros

Post author
Ramón Pedreño, BA in Business Administration and Master in Taxation, Partner in EMDER, Law and Business, and Strategic and Financial Advisor at IT&IS

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