Trust Under Pressure: Accountability in High-Stakes Relationships

What does trust actually depend on when the stakes are high and something goes wrong?

In this episode, Anne speaks with Eric Stein, partner at East Bay Investment Solutions, whose work sits inside one of the most trust-sensitive environments there is: investment decision-making. When advisors rely on your judgment to serve their clients, credibility is built in the details.

Eric shares two stories from his career that reveal opposite sides of trust. One shows how taking full ownership after a major mistake actually strengthened trust. The other shows how unclear expectations and misaligned incentives slowly weakened it.

As you listen, consider whether trust in your own work is being built by what you promise, or by what people experience when pressure arrives.

What You’ll Learn:

• Why owning a mistake can build more trust than avoiding one.
• How people decide whether you are reliable under pressure.
• The cost of delayed communication in high-trust relationships.
• Why incentives can quietly weaken trust over time.
• How better expectation-setting prevents unnecessary friction.
• What strong handoffs require when relationships change.
• Why follow-through matters more than good intentions.

Ideas Worth Sharing:

• “Trust is not only in what you say, but it’s in how you act and react to different things.” - Eric Stein
• “You want to certainly limit the number of mistakes you make, but if you do make them… let's make sure that we're accountable for them and how we fix them.” - Eric Stein
• “You need to trust that they're actually going to respond to you and that the relationship they have with you is as important as the relationship that we have with them.” - Eric Stein

About Eric Stein:

Eric Stein, CFA, is Partner and Senior Investment Strategist at East Bay Investment Solutions, where he serves as an outsourced Chief Investment Strategist for select financial advisory firms. With prior leadership roles at Goldman Sachs Asset Management and RSM U.S. Wealth Management, Eric brings deep experience across portfolio construction, risk analysis, asset allocation, and advisor support. He has been quoted in The Wall Street Journal and writes regularly on markets, due diligence, and investment strategy.

Resources:

• East Bay Investment Solutions
• Services & Pricing
• Schedule an Intro Call
• Join the Email List
• Learn How East Bay Helps

Connect with Eric:

• LinkedIn: Eric Stein

Connect with Anne:

• LinkedIn: Anne Claessen

Connect With Us

If you enjoyed this episode, follow The Rise and Fall of Trust wherever you get your podcasts. And if you’re thinking about launching a podcast that builds trust and drives results, that’s our jam. Schedule a free call at Cashflow Podcasting to learn more.

Transcript

SPEAKER_02 0:00

And what I wanted to do was spend as much time as I had. And frankly, I didn't know how much time I had, because candidly, if you asked me, I was pretty convinced I was going to be fired after this. And said, okay, well, what can I do, at least in the interim, to find out what the mistake was, try and and correct it for not only myself, but for my team. Was it something in the process? Was it something in our systems? What was it that where this came from?

SPEAKER_00 0:30

Welcome to the rise and fall of trust by Cashflow Podcasting. Here we explore how trust is built, broken and everything in between.

SPEAKER_01 0:50

He is partner at Ease Bay Investment Solutions. Eric, I'm super excited to have you on the Rise and Fall of Trust today. Welcome.

SPEAKER_02 0:58

Thanks for having me, Ann. I'm glad to be here and look forward to talking to your audience.

SPEAKER_01 1:03

Yeah, so tell me a little bit more. Easbay Investment Solutions. What exactly do you guys do and what do you do?

SPEAKER_02 1:10

Sure. So we are what is referred to as OCIO or outsourced chief investment officer. And while that's a broad term, we've started using the term more frequently fractional CIO. I think people have have kind of gravitated to that fractional part of it. And really what we are is you know we're an extension of an RIA's team. So if you think about the multi-billion dollar RAAs that are out there, they all have a CIO and maybe even an investment staff. But if you talk to the $300 million, $500 million RAA that's out there, there may not be the same need for a full-time CIO. So we play that role on a fractional basis. So we are an extension of their team doing the heavy lift on all the investment work. They still own all the decision making, but they don't have to be in the details on a day-to-day basis. We do that for them.

SPEAKER_01 2:05

Amazing. Okay. So you work with several different advisors, right? And help them serve their clients really well, if I understand correctly, then.

SPEAKER_02 2:15

Correct. Yeah, we are, you know, the I'll say the investment horsepower behind a lot of what they're doing. So if they're worried or thinking about making changes to their allocations or the investments they're using, we can support them. If they're doing a prospect review and want to compare the client, the prospect's current portfolio versus what the new advisor would give them in a new situation, we can show that comparison. If a client reaches out and says, Hey, I saw this article about XYZ, and I'm kind of curious about what my advisor thinks about it, the advisor can email us, we respond to the advisor, and then they can respond to their client on their behalf. So we again essentially are an extension of their team doing all of the investment work for them, but they always maintain discretion and decision making.

SPEAKER_01 3:01

Okay, okay, interesting. And how is trust important in your work? Is it important in your work?

SPEAKER_02 3:08

I mean, trust is is everything in our work. You know, whether it's in your personal relationships or your professional relationships, you know, trust is everything. You know, we're in a relationship business, you know, why and while the advisors we support do financial planning and we do the investment work, yeah, ultimately it's a relationship business. And the advisors we support need to trust that myself, my team, you know, the colleagues I work with have the ability, the credentials, the expertise, experience, whatever you want to call it, in order to support them in the way that they need to be supported. So you trust is trust is everything in what we do.

SPEAKER_01 3:46

Yeah, I can imagine, you know, trusting someone to advise that you give your clients, right? Because I just assume that, and I think we can assume that you know, financial advisors, they obviously want to help their clients really well. Like that client relationship is super important to them usually. So then I think, you know, building that on the information that you give them and the work that you do for them, I can totally see that as extremely important for these financial advisors. And so there has to be a lot of trust before they say, Okay, you know, I will actually advise my clients to do this thing that Eric told me to do. Yeah, 100%. I can definitely see that. So we're at a rise in full of trust, right? What story did you bring today, Eric, that is your rising trust story? So a story where trust was really important in a positive sense, where there was a lot of trust, or a lot of trust was built over time and kind of the effects that that had.

SPEAKER_02 4:45

Sure, I'll I'll actually bring a story from early in my career, if that's okay. I was a young analyst at a large firm, and I just remember the situation. I don't remember all the specific details of the situation, to be honest, but it was a situation where we had a very large, important client coming in, and I was responsible for generating at least part of the report and analysis that was going into that large important client meeting. And at some point during that meeting, it was recognized that there was a large error that had been made that was impactful to the report, and it had been come from directly from the work I had done. So they had you know come out of the meeting. Clearly, the people that were in the meeting were embarrassed on my firm's behalf. The client was clearly upset. Again, this is a very large, important meeting and clients. So having this large mistake was was not really the best thing that could happen to me. So I learned during the meeting again that this mistake was made. I had to work very quickly to try and correct it as quickly as I could, get them back some information that was more usable for this situation. And then once sort of that fire drill, if you will, was finished, I was like, okay, you know, what exactly just happened? You know, where how did this mistake get made? It wasn't like I just missed something, but there was clearly something in the process that was missed. And what I wanted to do was spend as much time as I had, and frankly, I didn't know how much time I had, because candidly, if you asked me, I was pretty convinced I was going to be fired after this. And said, okay, well, what can I do, at least in the interim, to find out what the mistake was, try and correct it for not only myself, but for my team. Was it something in the process? Was it something in our systems? What was it that where this came from? Wound up locating it and not only corrected it for myself going forward, but also corrected it in our systems and our processes and made everybody in the team aware of it. A few hours later, I get called into a very senior manager's office, someone that was, I'll say, one or two steps above my own manager. So you can get guess the gravity of the situation at that point. I closed the door, and again, I'm pretty convinced I'm going to be fired. And they asked me, what happened? And I think you know, when you talk about rising trust, I think trust is not only in what you say, but it's in how you act and react to different things. And I basically said, Hey, this was my mistake. I took complete ownership and accountability for the error, understood it was mine, it was nobody else's, and I wasn't going to certainly blame anybody else. And also let them know, like, hey, and at the same time, we've uncovered where the mistake was made, we've corrected it, we've fixed it, and this should never ever be a mistake going forward. And we're scouring our processes to make sure that there aren't other situations like this that could arise. And I think that just changed the tenor of the conversation. Now, this manager never told me what they were going to do, whether they were planning on letting me go or not. Fortunately, I was not let go, but I'm pretty convinced that again, the the character that we showed, that I showed the ability to take accountability, take ownership, raise their trust in me. I clearly wasn't going to make that same mistake again. And frankly, I also gained more trust in what they had to say because they took what could have been a very difficult moment for my career. And we made it a very coachable, teachable moment saying, okay, mistakes happen. And it's not a matter of what when mistakes happen. We know they're going to happen. We're all human, we're all going to make them, but let's figure out how we can react better to them and make a better situation from what it can be a very difficult situation. So I was, you know, gained trust in these senior individuals because I trusted what they were going to say and they were going to have my back. And I think they gained significant trust in me and my capabilities to say, okay, this person is accountable, they're taking ownership. And you know, again, I think we both gained mutual trust in that one early experience in my career, and it's something I've carried with me throughout my career.

SPEAKER_01 8:49

Yeah. What I'm also hearing is that, you know, I think for this senior manage manager to ask what happened instead of going in and saying, How could you do this? You know, I think there's also people who might have done that, but it sound it sounded like the start was like relatively open, like what exactly happened here that also gave you the opportunity to then explain exactly what happened and you know your perspective, and then actually show them what you've done. And I think this is such a good example because I think you know, fixing the problem is probably what most people at least try to do, but then also making sure that it won't happen again. I think that's like the extra thing that I can totally see how that makes you more trustworthy in their manager's eyes. And then them being open to that, I think, like you said, right? It it really builds that relationship. Because I don't know, like you tell me that you feel also that you could make mistakes after that. That, like, okay, like even if there is a mistake, as long as I fix it, I'm you know, I handle it well, we're okay.

SPEAKER_02 10:01

I'll say yes and no. I mean, yes, we're all human, we're all going to make mistakes. I'll I'll say in in this particular organization, and frankly, most of the organizations I w I've worked in, if you're making consistent mistakes, just the number of the frequency of mistakes, if you're making a lot of them, that starts to question, okay, is this person what are their capabilities? So, you know, you you want to certainly limit the number of mistakes you make, but if you do make them, and again, we all do make them, when we make them, let's make sure that we're accountable for them and how we fix them. But certainly we always want to do what we can to minimize the the number and frequency of those mistakes for sure.

SPEAKER_01 10:38

Yeah, absolutely. Absolutely. But I think like also knowing that okay, if if it's an honest mistake, it's if it's not the 100th, but if it's the first or the second, and then you handle it well and you can explain it, then that doesn't immediately mean that you lose your job. Right. I think that's also like the relationship building that you said, that okay, there's like mutual trust. I think, yeah, that's uh I think that's a really good story. I think it's really interesting to hear that that happened because I think it was a big client, right? Like you said, it was super important. So it's just really not ideal that there was a mistake, obviously. So then I think being able to turn that around and making that a positive story, I think that's that's really cool. That's amazing. Okay, Eric, but I'm also really curious, what did you bring for the other story, the story of falling trust, where trust didn't work out so well, mistakes were made, potentially. What what did you bring for us in terms of the falling trust?

SPEAKER_02 11:38

Sure. So, you know, in my current role and in uh you know one of my previous roles, I have the opportunity to work with a number of asset managers throughout the country. And you know, we're supporting advisors, we're investing in various asset managers' funds and you know their investments. So you know, we have close relationships with their you know, wholesalers or whatever title they have for that kind of role across these varieties of asset managers. And in one case, you know, the what's interesting is you know, asset managers all have their own way of managing these relationships. Whether, you know, for for example, in you know, whether I'm here in Charlotte where I'm based, or my clients are spread throughout the country, as in my current role and in my previous role, the advisors I support are spread throughout. Some asset managers will work with us and say, okay, you're gonna have one point of contact that's you know, wherever they're located, it doesn't really matter, but they're gonna work with you for all of your national relationships. And then we have other managers that we work with, asset managers, where they say, okay, we want you to have, let's say, 10 to 15 relationships, and we want you to work with the person in our firm that's most closely aligned with the advisor and their location that you're working with and supporting. So we might have multiple relationships. And, you know, that's fine. However, they want to support us is great, and we will do our best to work within that environment. And there's one particular situation of I'll say falling trust. We had a relationship with an asset management firm where for a long period of time we had had one individual that we were working with, and it didn't really matter where the advisors I was supporting were were located. And you know, whether it didn't matter if they were on the West Coast, the East Coast, the North, or the South. If we had a question, we would call this one point of contact and they would help and support us regardless. And that was wonderful, had a great relationship with this person. They're always very supportive. Like you know, this person and many other roles, they change jobs and you wind up having to transfer that relationship to somebody else. And you, I'll say, trust that the the relationship and the information from your relationship, whether it's in a CRM tool or whether it's through conversation, is transferred from the person you were working with to the new person. And you know, you always have to, you know, do your work to make sure that that's the case as best as possible, but you hope that they're doing the work on that side as well. And what we noticed pretty quickly after this relationship transferred to this new person was the questions that we were asking, the response time we were getting was significantly slower than what we were accustomed to. And so, you know, things that might have taken hours or a day were now taking multiple days or or longer to get responses for. And certainly, you know, when you're dealing with important questions and investments, time can be of the essence. And spending days waiting for a response is not always the best way for our clients to have trust in us if we're taking days to get back to them, not necessarily the best situation if that's outside of their expectations. So after multiple rounds of having, I'll say, delayed response, I finally just picked up the phone and called this individual to say, hey, you know, I'm not here to complain, but I'm here to just ask questions and understand expectations. Has something changed from where we were with the other person to this new relationship with you? Because here's what we were used to and here's what we're experiencing today. Help me understand. And what this individual told me was that their compensation structure was such that they were compensated for the work they would do to support me and advisors in their local region. And work they were doing for advisors in other regions did not directly affect their compensation. So they had little to no incentive to actually support those questions or answer those questions. And while I certainly appreciated their honesty in telling me that, at the same time, if there's no other solution, if they are my point of contact and my only point of contact, and I don't have the ability to reach out to 10 or 15 other people for these other advisors, that's also not an acceptable answer. So clearly, from a trust standpoint, again, I appreciated their honesty, but I also knew that going forward, I was going to get limited to little responses, not full responses, on questions that were coming from areas that were outside of the main territory that they were supporting. So that was clearly an issue for us and certainly has an impact on what that relationship looks like on a going forward basis.

SPEAKER_01 16:09

Yeah, wow, that's so weird.

unknown 16:12

Right.

SPEAKER_01 16:12

I think I I just cannot imagine how that works for them like internally, right? I think that's that's really strange. But then also how what happened after that? What is there now also another point of contact, or have they have they taken any action to kind of like solve these this issue?

SPEAKER_02 16:33

Yeah, so I'll say it's not necessarily a current issue, but in that in this situation, it was one where you know we worked with the individual to see if we could find connections and contact points in other parts of the country to say, okay, you know, if you can't help us, please at least connect us to the people who can, because we do need the answers. And you know, I'm certainly not here to judge the compensation and incentive structures of these asset management firms. They I'm sure they have really smart people in place to put these incentive and compensation structures in place to have the actions that they want to have happen with their employees, but at the same time, it just wasn't working for our situation. So, you know, we worked with them to try and find an alternate solution. It wasn't a great solution in that case, but again, it does have an impact on the overall relationship. And you say, okay, you know, if I have a choice between, you know, investment A and investment B, and investment A, I'm not getting the service I want, and investment B is very similar, and I am getting the service I want. Well, clearly we're gonna move from investment A to investment B going forward, all else being equal. So service is is certainly an important part of that relationship, and and trust is a massive part of that because you need to trust that that person, you know, understands what they're sharing with you, that that information is accurate. You need to trust that they're actually going to respond to you and that, you know, the relationship they have with you is as important as the relationship that we have with them.

SPEAKER_01 17:53

Yeah, exactly. A hundred percent. Yeah, I'm just thinking like what what could they have done better? Because it's it's such a shame, right? If you had such a good relationship with the person before them that this this hand hand off was just I wonder if like the handoff is that, right? Like what was it was is there such something that went wrong behind the scenes there or has this was this previous person just so great that they did everything? I don't I don't know. Like what what do you think they could have done better to make you feel like obviously respond to all questions, but what do you think, like you know, what what could we do different if something like this happens?

SPEAKER_02 18:37

Well, I think you're you're asking great questions in terms of you know what was the difference? Was it a change in compensation structure from point A to point B? I don't think so. I don't think anything changed, at least that I'm aware of. And it was it just that the person that we had previously was so good that they said, hey, we're here to support, you know, this firm, and we're here to support these individuals. And whether I'm directly compensated or not, I'm going to do the right thing, and that changed to the new individual. I honestly don't know the answer to that. You know, I think what the individual could have done differently is said, okay, you know, we're not the only firm out there, whether again it was my previous firm or my current firm that has this situation where you have one main point of contact and advisors spread throughout the country. So, you know, how do you, as a firm, support those type of entities? Can it be a change in structure? Can it be a change in support? You know, does it have to be a change in compensation structure? There's lots of different avenues that they can take on their end. From our perspective, you know, it's a matter of I just want to make sure that whether I have to go to one person or 10 people, just tell me so that I can make sure that I can get the best responses for my clients. Because on your side, it's less of an issue. You know, again, you have to do for your firm what's most important to you. I've got to make sure from my perspective that our clients are taken care of and we're doing what's in the best interests of our clients. So I need to be, you know, looking out for them more most importantly, more than anything.

SPEAKER_01 20:07

Yeah, absolutely. 100%. It was just not a good match in this case, clearly, right? So I'm I wonder, did anything change after this situation for you, how how you work with clients? Like, is there anything that you now communicate or like set expectations up front that you didn't do before? Like, did you make any changes after experiencing experiencing this like kind of like negative situation and handoff situation from the wholesaler?

SPEAKER_02 20:36

Yeah, I'd say from from our perspective, I'd like to think we've always done a good job of communicating expectations. So, you know, at East Bay, you know, when a new client comes on, we try to clearly communicate to them what the onboarding process is going to look like and what that's going to entail. We try to explain to them what the ongoing part of the relationship is going to look like. If they email or call us what the expectation should be for us to reach out to them and what those answers should look like. So, you know, we try to be very clear in making sure that we're communicating clearly. We're also listening to what they're asking us to do. You know, we're not just multitasking or hearing what they're saying, but not actually following through and listening. We want to make sure that we're sitting on the same side of the table as our clients because you know we are an extension of their team. We don't want to be seen as a vendor where we're just replaceable parts. We really do want to be an extension of their team. So that trust transfer and saying, okay, you know, here we have Eric or any member of eSpay working with us. We want to make sure that they're trusting in what we're doing. And again, that comes from communication, it comes from clarity, it comes from just having that trust behind everything that we're doing with them.

SPEAKER_01 21:45

Yeah, exactly. I think like setting those expectations. I mean, it sounded like you already had that in place, but it's this just shows how how important that is, right? Like how long before I get an answer to my question? When do you email me back? Can I email you when we can scream? I don't email you on weekends, like that kind of stuff. But also, like, I I think like what I'm also hearing from this story and what the kind of takeaway that I got was like internal communication, right? If these people would have communicated really well internally and have just transferred all the knowledge from the previous person to the new person, and maybe in that case, maybe, you know, maybe this wouldn't have happened. But I think, you know, what I'm taking away from this, okay. So if there is a new person taking over work from someone else, like that internal communication and like flagging anything that might become an issue, I think is super important to make sure that our clients have a good, kind of like seamless process when we're making changes internally. I think that's a big, a big takeaway that I got from your story.

SPEAKER_02 22:53

Yeah, no, that's great. I say I also think too, when you talk about setting expectations, the other half of that is actually following through and making sure that you do what you say you're going to do. So it's great if I can sit here and say, here's what we're planning on doing. If I don't actually follow through and do that, I'm not going to have the trust that I have the same way as if I actually do follow through and you know do everything that we say that we're going to do. So the trust is, again, it's not just in the words, but it's in the actions that that follow everything that that comes after.

SPEAKER_01 23:24

Yeah, absolutely. Yeah, actually, I think that's a that's a great point as well, because maybe if this person would have, if you would have sent a question and then this person would have reacted with, hey, listen, I cannot help you with this because, you know, I'm not getting paid for it, or whatever it is, like I just I cannot help you with this, that might have been a completely different conversation than just not answering or answering answering extremely late. So being a little bit more proactive in that and saying, like, hey, this I can help you with, this I cannot help you with. I think that's also something that we can apply right now, today, if something like this happens.

SPEAKER_02 24:00

Exactly. Yeah.

SPEAKER_01 24:02

Amazing. Well, Eric, thank you so much for sharing your stories. I I had some cool little takeaways that are a little bit different because you know, often in these conversations for the rise and fall of trust, we very often talk about communication, of course, transparency, visibility. But I think this is a little bit different, where it's more like internal communication, setting expectations, but also what you what you mentioned, owning your mistakes and taking the actual step, like one more step, not just fixing the mistake, but then also making sure it doesn't happen again. Like actually that step. I think those are some really, really good and like different trust building, I would always almost say techniques, but like situations that we can we can take away from your story. So thank you so much for sharing those.

SPEAKER_02 24:48

Oh of course, thank you for the opportunity. I appreciate it.

SPEAKER_01 24:51

Of course. We will also add all your links to the show notes, but tell us where people can find you if they want to see you, see more of you online.

SPEAKER_02 24:58

Sure. They can find more about ESPay at eSpayis.com. They can certainly find me on LinkedIn, and our website will also have places where they can connect to either join our newsletter or to set up some time to learn more about ESPE if they're interested as well.

SPEAKER_01 25:15

Amazing. And like I said, all the links are in the show notes. So you can just go to the description, click all the links there, connect with Eric. Thank you again for being here on the show today, Eric, and thank you to our listeners for listening.

SPEAKER_02 25:27

Thank you.

SPEAKER_00 25:30

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