Earning customer trust and keeping that trust is the most important commodity a financial company offers its clients. Although sorely challenged recently, Essex Financial Services, a Connecticut-based subsidiary of Essex Savings Bank, pulled through their crisis in the best possible way.
The trouble began when the founder of the firm, John Rafal, was accused of obtaining a large account by means of an illegal referral fee. He then tried to cover up the payment, but was unsuccessful, and a government investigation ensued. Some of the firm’s top advisors left, and some customers. A strong, positive reaction was needed for the company to regain the confidence of its clients and the US Securities and Exchange Commission.
Into the fray entered Charles R. “Chuck” Cumello, Jr. Already part of Essex Financial, he was promoted to the office of chief executive and president, while Rafal, at first, remained on as vice chairman. Eventually, under pressure from the SEC, Rafal was fired and then banned from the securities industry.
“We handled it the way we should,” Cumello said in an interview this month at Essex Financial. “At the end of the day, this is a trust business; there is a right way and a wrong way. … We navigated some rough waters, but we did what we had to do.”
Essex Financial paid a fine for the unethical actions of Rafal. But to regain the trust from the firm’s clients Cumello insisted that the firm assert an uncompromising requirement of utter transparency.
One colleague, John Patrick, president and CEO of Farmington Bank, which has a marketing partnership with Essex Financial, had the following praise for Cumello:
“Chuck kept me abreast of everything,” Patrick said. “He’s done a terrific job considering the (situation) that he inherited.”