More than half of all U.S. households now own mutual funds, stocks, bonds, or some other product that exposes them to market risk. After four years of double-digit returns in the late 1990s, the past two years have seen double-digit declines. Consumers who used to think that the words saving, investing, and speculating were interchangeable now realize that they're not and that understanding and acting on the distinctions between them can make all the difference in the world. After September 11, concepts such as protection, portfolio balance, and even life goals have taken on new meanings.

In the past 20 years–until now–many of the major financial services, except in the investment community, have had a period during which consumers' confidence in that area dropped significantly. Financial planning, S&Ls, banking, insurance, consumer financeeach area has had its public problem period. Now investors are looking at their investments and asking, What should I do? Whom do I trust? To whom do I turn?

During the run of the Bull Market, many investors thought they didn't need to trust anyone–that they could do it all themselves. Other investors thought they could trust their investment advisors and market analysts. Since then, however, consumers have seen that investment professionals are not infallible, that they can be influenced by their company's own positions, the IPO market, or their company's investment banking activities–or all of them. The same herd mentality that tends to encourage investors to chase last year's returns and today's hot sector flourishes even among the professionals. So caveat emptor remains the guiding principle of the social contract between investors and their financial-market intermediaries.

Consumers thought they could trust the accountants, too–those sharp-penciled practitioners of a precise and impartial science who provide objective evaluations of companies. They thought accountants were certified, had standards, and adhered to GAAP (generally accepted accounting principles) that they applied impartially and precisely. They thought that annual statements adhered to strict standards that enabled investors to compare and evaluate companies on a level playing field. Now, they're not so sure. Recently, pro forma results, unique events, off-statement accounts, and other relatively unstructured items have found their way into almost every industry, suggesting that companies should file annual reports under "fiction." Now we know that accountants have engaged in additional consulting activities–and would continue to do so–even where a conflict of interest exists.

What about the government? Apparently the laws that control campaign contributions, political-action committees, and soft money are not enough to limit influence. Can consumers trust the government and its myriad bodies of overlapping regulatory agencies whose charge and charter are to serve the public's interests? Can our public servants, either elected or appointed, be corrupted by financial influence, personal aspirations, or political objectives? During the committee hearings on Enron, accounting, regulation, and retirement reform, we will likely witness personal and political objectives overshadowing more critical discussions about public duty and the public good.

What about employers and large companies? Customers expect products to be safe and to perform as promised. Investors believe that companies are good corporate citizens that pay their taxes and adhere to the all the rules and regulations. Companies of today may not act in loco parentis as schools or company towns did in the early twentieth century, but they do provide income, health-care insurance, and retirement, among other benefits, to a huge proportion of the U.S. population. Would these companies relinquish or abuse their fiduciary responsibilities to their customers, their community, or their employees? Apparently a lot of gray area remains in the fiduciary responsibilities between employees and their employers.

And what about the media–the fourth estate–whose de facto license is to provide timely and accurate information and root out and expose inequality and illegality? Surely this watchdog would not stoop to cheerlead and serve as a blind proponent of the sensational, simply to sell advertising! Yet as consumers have more and more exposure to media in the financial arena–via newsletters, magazines, television, mailings, e-mails, Web sites, articles, advertorials, advertisements, brochures, and the like–they necessarily become jaded. Now they filter out excess information, question the sources and the angle, limit their intake, and adjust their interpretation of the information.

Years from now, we may look back at 2001 and, in addition to the tragedy of September 11, what we may remember most is the crisis of confidence created by the combined effect of the dot-com bomb, market decline, Supreme Court­selected president, extended recession, retirement erosion, and Enron debacle. It's no wonder that investors don't know what to do and don't know to whom to turn. We at CFD have learned about consumers and their financial services over the years that when you don't know what to do, do nothing!

Even though the markets have just turned in their second year of double-digit declines, we believe that consumers are not going to forsake investing and return to passbook savings. As they did in previous crises of confidence in other financial areas, consumers will tend to exclude their own institutions, intermediaries, and employers from the malaise of the industry. During the S&L crisis, they felt secure about their bank (until it closed its doors). Now, they may condemn investment advisors in general but will trust their investment advisor (until he or she absconds to the Caymans). Now they may sympathize with Enron employees, but will believe that their employer would not play foul. (Today is a far cry from the time when the unions flourished!)

The solution to the current crisis in confidence may lie not only in this tendency to trust our personal representatives but also in the healing effect of time. Hearings will take place. Legislation will pass. Lawmakers will put new regulations in place, and agencies will have the power to enforce them. If criminal activities occur, someone will charge the culprits, courts will convict them, and the guilty will make restitution. Wounds that no one can fix will heal in time. Ultimately, public trust will return.

Right now, financial institutions and their representatives have their work cut out for them. A return to public trust will take concerted effortin both the actions and the messages from both the institutions and their representatives. The key lies in the recognition that every interaction with a household is an opportunityan opportunity to increase or to destroy trust. Because every insert, every ad, every phone call, every article can have either a positive or a negative effect, institutions that ensure that their interactions are positive will slowly rebuild, brick by brick, the edifice of trust on which customer relationship stands. This rebuilding is what customer-relationship management (CRM) really means.