Posts

Trust Tip Video: It Takes Two to Do the Trust Tango

Establishing a trust-based relationship has always been a two-way street. Like a good Argentinean Tango, there has to be a routine where risk and reciprocation are involved. What can you do to build a more trusting relationship? How do you know which role you play in the trust tango? When should you lead, and when should you follow?

In this week’s Trust Tip Video, we discuss the difference between trusting and being trusted. The two work together cohesively; there is no trust without risk and no trust-based relationship without a first step.

If you like the Trust Tip Video series, and you like our occasional eBooks, why not subscribe to make sure you get both? Every 2-4 weeks we’ll send you selected high-quality content. To subscribe, click here, or go to http://bit.ly/trust-subscribe

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.

Trust in the Search Business: the Bowdoin Group

The Bowdoin Group is a mid-sized executive recruiting firm based in New England. Sean Walker is a partner at Bowdoin, and heads their Information and Media Division. We met over seafood at the Oyster Bar in Grand Central a few months ago.

I’ve always felt that executive search is one of those “perfect” trusted advisor businesses – like pharmaceutical reps, wealth managers and client managers in accountancies. Perfect in potential, that is; perfection is not the norm in any of those businesses, and far from it in some.

Sean and Bowdoin look like exceptions: they “get it,” and practice the principles of trust, as you’ll see.

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Charlie Green: Sean, you just lost a big sale; you’re disappointed, but clearly not upset. What’s up with that?

Sean Walker: It’s not about the transaction, it’s about the relationship. We’ve got three other projects working in that organization, and they like us. This one just wasn’t right for them, hence not for us either.

Charlie: So how do you think about this business?

Sean: We don’t think of it as skills-based, and we don’t think of it as project-based. We have to have domain expertise – industry knowledge, networks and so on – but we equally well have to work the relationship. The most important thing we do – and often the hardest – is to approach this business strategically.

Charlie: Can you say more about what that means to Bowdoin?

Sean: It means some of what you write about; you never do a deal or a job or a project – you develop an ongoing relationship, which contains jobs along the way.

When we fail, it’s almost always because we started to follow our own agenda, falling in love with the results, the process. When we get it right is when we remember to listen and learn; to be a human capital advisor, helping them to build their organization.

And the funny thing is, the more you focus on the strategy, the better the tactical results happen to get.

Charlie: How do you deal with the fact that many clients are seeking you out as transactors, looking for a candidate, measuring your lead lists?

Sean: Some clients are like that, some are not, and some can evolve along with us. The client we just lost that project for is a great client – their sales guy wants us to partner with them to create a new organization.

And clients, just like us, can learn to behave more strategically. People can be very short-sighted, but if you take the time to understand the person you’ve got on the other end of the line, if you can get some one to be intimate and speak to you about their fears, you can solve not only the immediate issue in front of them, but you can understand both them and the company better. Then you can get to the core. And then it flows.

Charlie: You said it’s hard to keep focused; what are some of the pitfalls, or temptations, along the way?

Sean:  Oh gee, let’s see. Goals and targets, if you’re not careful. Clients that want to treat you transactionally, price-haggle, are short-term focused. An industry that, more often than not, thinks opportunistically–hopping from opportunity to opportunity.

Charlie: Where does trust fit here?

Sean: It’s all around. It’s the business, if you do it right. The fact that people let you in and give you that trust, it makes it all worthwhile.

Charlie: What do you say to those who say, “Yeah, that’s nice, but you’ve got to make money.”

Sean: They are so missing the point. This way of doing business is 100% more profitable – and it can make your job much easier. Because once you’ve proven yourself, the business comes back to you–you’re not always jumping from opening to opening.

If you take the time up front, it pays off all along the line, across multiple decision-makers. When we fall of the strategic trust wagon, that’s when our profitability goes wrong.

Charlie: Sean, it’s been a pleasure. Good luck, but I bet you don’t need it.

Sean: Thanks Charlie, it’s been a pleasure likewise.

 

Trust Tip Video: The Two Most Trust Destroying Words

What are the two most trust-destroying words? An interesting enough question by itself; but even more interesting is just why these two words carry such toxic power.

To learn both the words, and the source of their negative effect, listen to this week’s Trust Tips Video: The Two Most Trust-Destroying Words.

And for more information on this week’s Trust Tip Topic, you might also enjoy reading this blogpost.

If you like the Trust Tip Video series, and you like our occasional eBooks, why not subscribe to make sure you get both? Every 2-4 weeks we’ll send you selected high-quality content. To subscribe, click here, or go to http://bit.ly/trust-subscribe

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.

Story Time: He Who Eats With Chopsticks Wins

Our Story Time series brings you real, personal examples from business life that shed light on specific ways to lead with trust. Our last story proved that trust is personal.  But what does it take to really close a deal?

A New Anthology

When it comes to trust-building, stories are a powerful tool for both learning and change. Our new book, The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust (Wiley, October 2011), contains a multitude of stories. Told by and about people we know, these stories illustrate the fundamental attitudes, truths, and principles of trustworthiness.

Today’s story is excerpted from our chapter on the dynamics of influence. It vividly demonstrates how non-rational factors—like respect for tradition—can make or break a sale.

From the Front Lines: Decisions Aren’t Just Rational

Russell Feingold, now of Black & Veatch, recalls an early-career sales win.

“The client was a large electric utility in Hong Kong, and the project was complex. My company invested considerable time preparing our proposal, responding to questions, and meeting with the client face to face in Hong Kong. We won the project.

“However, it was during our working lunches that I really won the client’s trust—by my proficiency with using chopsticks. Quite simply, my clients appreciated my respect for their tradition, when even their own children were turning to Western ways of eating. To this day I believe my ability to use chopsticks not only ingratiated me with our client for the remainder of the project, but was a deciding factor in our being selected in the first place.”

—Russell Feingold (Black & Veatch)

What’s the most unexpected factor that’s won you a job?

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Read more stories about trust:

Trusted Advisor Inflation

The term “trusted advisor” has undergone some changes since I first co-wrote the book by that title 11 years ago.  Three changes, to be precise:

  1. It’s amazing how many more people claim to be one;
  2. It’s becoming clear that not every industry needs one;
  3. In the industries and functions that matter, the concept is gaining headway.

It’s the third point that’s most important, and most promising.

1. Grade Inflation, Title Inflation, Trusted Advisor Inflation

The United States has taken to heart Garrison Keillor’s fictional Lake Wobegon, where “all the children are above average.” That’s got to be the only sensible conclusion from the data, which show in-your-face grade inflation at the college and university level.

A couple of years ago, the Economist proclaimed that “Inflation in Job Titles is Approaching Weimar Levels.” (In case you’re not down with economist jokes, read here, and I won’t tell anyone).

So I guess it’s no wonder that we have “Trusted Advisor inflation.” I’ve sat in on several corporate training programs lately where generally mid-level attendees were asked to indicate whether they were operating at the “trusted advisor” level with their clients.

About 70% said they were. That may not be Weimar territory, but it’s Lake Wobegon for sure. I will tell you from experience: that was not the case 12 years ago, even in the same industries.

My conclusion? Not much, actually. We live in a post-Warholian age of hyperbole. “Friend” doesn’t mean what it used to, nor do “authenticity,” “talent,” or “good audio,” for that matter.  But it’s OK: it means what it means, namely how people actually use the term. Definitions are living things, captured only momentarily in dictionaries.

2. Not Every Industry Needs a Trusted Advisor

I had dinner the other day with an old classmate, a very senior advisor to a Very Big private equity fund, who keeps tabs on a dozen global retail clients. “So Charlie, tell me what’s up with Trusted Advisor Associates these days,” he said.

It was clear from his tone that he was skeptical about the relevance of the concept to his businesses – mainly B2C consumer-level chains in things like pet foods, electronics and sundries.

I could tell that because he visibly relaxed when I said, “Gary, I don’t need a trusted advisor relationship with the counter-guy at Dunkin’ Donuts. I love that he knows my order when he sees me come in – but that’s quite enough. It would ruin everything if we ever got past, ‘hi guy, the usual?’ And ditto for Starbucks.”

It’s true. There are whole bunches of roles and industries that don’t need to have trusted advisor relationships. Most B2C retail doesn’t need it. Traders don’t need it. Marketers don’t generally need it. Most non-client-facing roles don’t need it. Manufacturing roles don’t generally need it.

That’s not to say all those roles can’t benefit from the basics of curiosity, good values and manners. But, as per point 1 – let’s not inflate that into Trusted Advisor Status.

3. Those That Do Need It – Are Starting To See It

The term “trusted advisor” originated in high-end professional services and wealth management relationships and it’s still valid and well-understood there.

The biggest shifts I’ve seen since the original The Trusted Advisor in 2001 have come in four areas: sales, internal staff functions, leadership and the financial industry. (One industry that’s still a work-in-progress – pharma).

Sales. In the last decade or so, the field of sales has undergone a number of changes. Some – like Salesforce.com, Sales 2.0, Google clicks – have often made the function less personal, and arguably less trustworthy.

But others – like inbound marketing, complex sales, and the amazing transparency machine called the Internet – have made selling more personal, and often more trustworthy.

I like to think my own book, Trust-based Selling, published by McGraw-Hill in 2005, played a little role in that too.

Internal Staff Functions. The Big 5 staff functions – HR, IT, Legal, Marketing, and Finance ­– have made large jumps in many companies to realizing that their internal client relationships have exactly the same needs. How to get invited in before problems arise; how to get your advice taken; how to add value – these are all critical functions for an internal staff function. More about those functions here.

Leadership. Tons of things have changed with leadership. Let’s sum it up by saying leadership has become more horizontal, less vertical. That moves influence, persuasion and trust way up the required skills list for leaders.  Rob Galford wrote about that in 2003 in The Trusted Leader; Andrea Howe and I wrote about it in last year’s The Trusted Advisor Fieldbook: A Comprehensive Toolkit for Leading with Trust.

Financial Industry. Something is happening in the financial planning and wealth management industries. The line between brokers and fiduciaries is finally getting defined, and the balance of power seems to be shifting toward trusted advisor, client-focused relationships. (Some of you know this issue as fiduciary vs. suitability).

The issue is delightfully defined in a YouTube video about the difference between your butcher and your dietitian.  For more on this issue, read Michael Kitces, who writes well and often about it.

Just around the industry corner is Wall Street, investment banking, and the flap about Michael Smith’s Goldman resignation. Investment banking used to be a pure trusted advisor kind of business. People like Epicurean Dealmaker still speak eloquently about that part of the business.

But investment banks have more complex business models these days, and it’s far from clear (to me anyway) that all of those businesses should be built on the long-term, client-centric models required by true trusted advisors.

Conclusions:

1. Just because you think you’re a trusted advisor doesn’t mean you are one – Lake Wobegon is mythical, after all.

2. But neither does it necessarily mean you should be one. We don’t need trusted advisors on every street corner.

Sometimes a cigar is just a cigar, and we should leave it at that.

Trust Tip Video: Trust Takes Time?

One of the more common sayings about trust is, “Trust takes time.” In fact, like several other truisms about trust, it’s far from true.

Moreover, the way we use that phrase–“trust takes time”–is often more by way of excuse than explanation.

To see why, listen to this week’s Trust Tips Video: Trust Takes Time? That’s a Cop-Out.

For more information on this week’s Trust Tip Topic, you might also enjoy reading Top Trust Myths: Trust Takes Time.

If you like the Trust Tip Video series, and you like our occasional eBooks, why not subscribe to make sure you get both? Every 2-4 weeks we’ll send you selected high-quality content. To subscribe, click here, or go to http://bit.ly/trust-subscribe

Trust and the Sharing Economy

What if everyone could be trusted? And everyone became willing to trust?

Unrealistic? Sure, if you insist on all or nothing.

But if we moved directionally toward those goals, it’s not hard to envision significant improvement. Increased trustworthiness, and increased propensity to trust, would most likely lead to:

  • Fewer and simpler contracts
  • Fewer lawyers and lawsuits
  • Less transaction complexity
  • Lower insurance costs

This is not pie in the sky. There is an emerging part of the economy that does precisely this: it’s called the Sharing Economy, or Collaborative Consumption.

The Sharing Economy

The Sharing Economy is composed of assets which were previously owned by single entities (either persons or corporations), but which have been freed up to be used by many. Perhaps the best-known example of the concept is ZipCar.

In principle, the concept can apply to any asset used at less than its full capacity. That includes all manner of goods.  Airbnb has made a business of helping people rent out their homes. Couchsurfing is just what it sounds like.

This can sound like pure 20-something left coast social experimentation, but it’s also gotten the attention of General Motors. It’s not fundamentally different than when McDonalds figured out it could use its under-utilized real estate to serve breakfast.

In fact, the Sharing Economy is resurrecting some 19th century ideas like the Grange Movement that helped stimulate the Great Plains agricultural economy.

For that matter – remember libraries?

Trust: the Backbone of the Sharing Economy

The Sharing Economy is, pure and simple, about trusting strangers. How, in an age of global markets and internet-based communication, can we do that?  Or to make it more personal: what would it take for you to rent your house or apartment for a week to someone from France you met online?  And how, finally, can you make that answer scalable?

That, it turns out, is one of the fascinating aspects of the Sharing Economy.  It doesn’t make sense for each sharing business model to develop its own proprietary database, any more than it makes sense for every mortgage lender to develop its own creditworthiness database.

Hence, the race is on to determine who will develop the FICO score of trustworthiness, the most dependable metric, the database that will provide the underpinnings of a potentially considerable amount of economic activity.

Trust Metrics

I have written a White Paper on this subject: Trust and the Sharing Economy: A New Business Model. [I should add here – full disclosure – I am an advisor to and have a financial interest in one of those players, TrustCloud.]

The Sharing Economy is a microcosm for observing trust concepts I’ve been writing about for years. For example:

  1. Trusting vs. being trusted: If you have an apartment you’d like to rent out, you are the one doing most of the trusting; your question is about potential renters – are they trustworthy? So often missing in general discussions of trust (“trust in banking is down…”), the distinction is obvious and vital here.  What’s needed is trustworthiness ratings of the potential renters.
  2. Reputation vs. trustworthiness: It’s easy to mistake reputation for trustworthiness, and some previous online trust metrics have done so. The result is data that suggest Perez Hilton and Justin Bieber lead the pack in trustworthiness.  Does not compute.
  3. Trust comes in several flavors, and is all about context. Unlike digital recordings, some forms of trust don’t travel well (remember the game of “telephone?”). Or as I’m fond of saying, I trust my dog with my life – but not with my ham sandwich.

In the race to build trust metrics, it’s tempting to over-emphasize the technical aspects of the problem. But in the case of trust (as with knowledge management), the more important problem to solve is to correctly define trust and its indicators.

I’ll be writing more about this in future.

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.

For continued reading check out: Trust Is Not Reputation

Market Segmentation Does Not Equal Trust

A piece from PharmaVoice caught my eye the other day. Titled Market Capitalization, it talks about how market segmentation can help pharma companies more precisely reach targeted audiences.

All well and good, until I saw this:

…just as personalized medicine is becoming a best practice for delivering optimal healthcare, personalized messaging to the physician audience is increasingly becoming a best practice for marketing.

Careful segmentation allows marketers to specifically target the audience with messages that speak directly to them. Segmentation helps deliver the right message to the right physician at the right time. Personalization shows physicians that they are intimately understood, which fosters trust and value.

No, it doesn’t.

Careful segmentation in messaging tells me there’s a better chance that your information will be relevant to me.

It does not tell me I’m intimately understood; it tells me you’ve got smart robots.

The difference matters.

Trust and Segmentation

Rifle-shot targeting and segmentation affects one out of four of the Trust Equation components: it speaks to your credibility. Credibility tells me you’re smart, credentialed, competent.

That’s helpful, indeed. But it doesn’t speak to the other three components: reliability, intimacy, and low self-orientation – particularly the latter two.

The casual conflation of credibility and intimacy is, I think, a hallmark of modern marketers. Most of them, I suspect, would say, “Oh come on, Charlie, that’s just a small matter of semantics.”

Not so. Our words belie our thoughts. When we easily slide from a mechanical formula to a claim of “intimate understanding,” we have lost something. And to trivialize the slide is to lose even more.

Trust and Understanding

The dynamic of personal trust is complex; part of it is rational and deductive. But much of it is psychological, interior, calling on other-than-frontal-lobe kinds of brain functions.

That sense of being connected, appreciated, and validated leads us to lower our guard, to accept deeper relationships, and be open to advice-giving, among other things.

In this sense of the word, we come to trust by way of being understood; and we come to be understood through the means of other people intentionally paying attention to us.

This business of paying attention to other people is what drives personal trust creation. Marketers using technology to develop rifle-shot segmentation schemes are doing perfectly good and useful work. But not in their wildest dreams does this make customers feel “intimately understood, which fosters trust and value.”

Please, marketing and communications people, let’s try and remember the difference.

25 Warning Signs You Have a Low-Trust Organization: Part 5 of 5

If your customers and clients tell you they don’t trust you, things have gotten bad. But you could have seen it coming. There were many early-warning signs of low trust in your organization.

This is the last in a series of five. The other posts address warning signs of low-trust organizations coming from:

How Your Clients and Customers Tell You You’re Low-Trust

It’s almost inconceivable that a high-trust organization will have low-trust relationships with its clients or customers. And that works in reverse: low-trust buyer relationships are a tip-off that something is amiss internally as well. Sometimes it’s easier to read the external signals, so here they are:

1.    Your colleagues speak disparagingly of your customers.

  • “They’re trying to pull a fast one on us; we can’t let them get away with it.” Whoa, simmer down. People who ascribe negative motives to customers’ actions without data, will generally do the same within the organization.  With all due respect to Andy Grove, paranoia is rarely a good corporate value to promote.
  • “I’ll believe it when I get it in writing.” If your people insist on contractual, legalistic relationships with customers, they’ll do the same internally. And since trust greatly reduces time and costs, that attitude is costing you dearly, internally as well as externally.

2.    You haven’t gotten a new referral client in 6 months.

  • This is such a key concept that it has been quantitatively refined (brilliantly) in the Net Promoter Score first developed by Bain’s Reichheld and Markey. At its heart: the single metric that best correlates with success is your clients’ tendency to promote you.
  • If you have great referrals, you almost certainly have delighted customers and energized employees. And that rarely happens without great levels of trust within the organization.

3.    You’re losing customers and don’t really know why.

  • Look at your customer list: is it basically growing or shrinking? Come on, you know the answer, pick one.
  • Now ask yourself: do I really know why that is? Or do I have a list of anecdotal, seemingly unrelated reasons? The CEO left; that guy’s a complete jerk; they decided to go with the low-price provider; they’re rationalizing suppliers.
  • That is not an unrelated list, after all. The common denominator is, they don’t trust you. And if your customers don’t trust you, the odds are remote that you live in a high-trust organization.

4.    You’re being asked to submit bids and respond to RFPs for long-time clients.

  • We don’t want to be dogmatic about this one: there is a long-term, secular trend toward professional procurement. That trend is not Evil incarnate; the procurement people are your new clients. Treat them as such, respectfully.
  • However: if YourCo seems to be singled out for this treatment, if it’s not a slow trend but a landslide for you, then maybe the market is telling you something. It’s telling you you’re not trusted. If you were trusted, you’d be seeing many fewer RFPs, you’d be getting sole-sourced where reasonable, you’d be getting in to define some RFPs, and you’d be getting some very personal coaching from the customer about how to operate in the new procurement world.
  • That’s not happening? Then odds are, your customers don’t trust you. They’ve never been shown the difference between genuine concern and manipulation. They’d prefer to deal at arms-length, with professional buyers who are immune to emotional bullying and enticement alike. They prefer to deal on price, because they haven’t been shown any good reason to deal on any other basis.
  • And if you’re quoting on price, using self-oriented sales tactics with your customers, then you probably don’t respect your own products, value and organization. Sounds like low-trust.

We hope you’ve enjoyed this little series on warning signs of a low-trust organization. Writing it has reminded us of two things:

1.    Trust is infectious. A high-trust organization is highly correlated with high performance on so many dimensions: innovation, people, leadership, products, and markets.

2.    Trust begins at home. Correlation is not causality, but causality is clearly at work in trust. Furthermore, it flows more in certain ways than in others. In very broad terms, the five factors we’ve discussed move in the following manner to create a high-trust organization.

It generally starts with leadership; but that’s a different series for another time.

 

25 Warning Signs You Have a Low-Trust Organization: Part 4 of 5

Are you part of a low-trust organization? There are a surprising number of symptoms and tip-offs; perhaps the least obvious are in the organization’s products and services. This is fourth in a series of five. The other posts address warning signs from:

Product/Service Warning Signs of a Low-Trust Organization

Take a hard look at YourCo’s products and services. Not only do they provide tipoffs about high or low trust – they are themselves the beneficiaries (or victims) of high or low trust. YourCo’s market offering is very much tied up with trust.

Here are some product/service indicators of low trust at YourCo:

1. Innovation is low in YourCo.

  • Pick five big-picture indicators of innovation and rank your organization vs. your competitors. If you rank high, you probably have a high-trust organization. Low? Then probably not so much.
  • If you don’t rank well, you’ve got well-rehearsed excuses. “We’re like Apple, we’re not first in but we get it right.” “We focus more on service quality than on innovation per se.”  But you know what? Apple innovates. Ritz-Carlton innovates. Just in different areas. What’s your area?
  • The simple truth is, high-trust organizations foster high levels of innovation; low-trust organizations don’t. The lack of innovation is a canary in the coal mine; innovation itself is one of the great benefits of high trust.

2. Complaints are considered routine at YourCo.

  • Nobody’s perfect? OK. But if a complaint about your product or service no longer produces pain or angst within YourCo, then you’ve lost trust. Customers will sense that you’re unreliable, and – worse – that you don’t care.
  • Maybe this is just us, but we think those “please take a moment and rate your service” approaches hurt trust. They are automated; they leave no room for creativity; worse, they are all about YourCo and YourCo’s internal evaluation scheme. And worst of all, they pretend to be about the customer.

3. You don’t offer guarantees.

  • If you’re a retailer offering $1.99 items, “satisfaction or your money back” is no big deal. But if you’re a professional services provider, the value you provide may be way beyond the cost you charge.
  • What would it cost you to guarantee the cost of your service? If you’d lose money doing that – then maybe you have a service quality problem. The perception of not standing behind your service is that you yourself don’t trust it.
  • If you do offer a guarantee but it’s in small print, and you quibble over it, you just lost the value of the guarantee. That means you view guarantees as a cost of doing business, and not as a sign of confidence and customer respect. That will cost you trust.

4. Information is not forthcoming.

  • In this day and age, all customers – B2B, B2C – want easy access to every question they might have. The organization that gives you easy access to answers is the one that gets your trust.  The organization that manages your access to information so that you only see what they want you to see when they want you to see it – that’s the organization that loses your trust.
  • Put everything you can imagine on your website. That doesn’t mean it has to be all above the fold on page one; it just means you have to make it very available, and reasonably accessible. If I can’t find it, I infer you must be hiding it.  And I don’t trust you.
  • There are some questions I want help with; that’s when you make 800 numbers available, click here for live chat…  If instead of those options I get, “this is a recorded message; please call back during the hours of…” that’s when trust declines.

5. You think you’ve got the hamburgers.

  • In the early days of McDonald’s in Moscow, I’m told, customer service attitudes were hard to change. As one employee told a hapless American from corporate, “You people don’t seem to understand.  You see, we have the hamburgers; the customers don’t. They should be nice to us.”
  • Working from trust in business means you don’t trap people into doing what you want. Instead, you give them what they want; then let them live up to their humanity and give you what you want. The best way to create trustworthy customers is to trust them with your products and services.

The next blogpost in this series will be the last: client and customer tip-offs about whether you’re a low-trust organization.

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Many Trusted Advisor programs now offer CPE credits.  Please call Tracey DelCamp for more information at 856-981-5268–or drop us a note @ info@trustedadvisor.com.