New ASIC chairman James Shipton, six weeks into his new job, welcomed delegates to the regulator's annual forum with an analytical tone in contrast to the strategic speech that might have been delivered by his predecessor, Greg Medcraft. In his first speech since taking over at the Australian Securities and Investment Commission, Shipton explained that he'd spent the last few years running the program on international financial systems at Harvard University, which had him thinking about trust in the financial sector. "During this time I had the opportunity reflect on one of the key fault lines in the financial system: the trust deficit," he said.Shipton suggested that in the financial system, trust can be broadly classified into two categories, noting that "should there be decay in one it will inevitably degrade the other". He said the two categories were:•    trust in the infrastructure, in the bricks and mortar that make up the financial system: "we trust that the payment system and exchanges will function effectively, that banks will hold safe our deposits," he said; and •    trust in people, that the people in banking, insurance and funds management will keep their promises, act in our interests and live up to community expectations: "we need to trust that directors, auditors, mortgage brokers, and financial planners will do their jobs with competence and honesty.""In my observation, there is generally - at present - high levels of trust in the infrastructure that supports our system and enables the underlying financial 'plumbing' to work," Shipton said."[Yet], while we have high levels of trust in this underlying financial plumbing, financial services is one of the least trusted industries. ... [Therefore] the sad conclusion must be that Australians don't look to people in finance with enough trust."Citing "some useful work by the CFA Institute", Shipton suggested there are three factors "that assist in being seen as trustworthy in the financial services context":•    competence - having the right skills and knowledge to do the job;•    care - the extent to which a person wants to do a good job; and•    ethics - doing the right thing, even when no one is watching.In pondering the role of finance, Shipton said: "We must never forget that, ultimately, the financial system provides vital functions for the economy and for society. And if we get things wrong the result could very well have a devastating impact on real people."In defining this, he cited Professor John Kay's four functions, from his book "Other People's Money:•    capital allocation: matching those who need capital with those with excess capital;•    inter and intra-generational transfers of wealth;•    hedging and insuring against risks; and•    The payment system: "this most fundamental function is the one that many of my students tended to overlook," he said.Shipton then worked his way towards a statement that the financial industry needs to look at its broader value proposition, and the way to achieve that is professionalism. This in turn is constituted by competency; and conscientiousness."We need to recognise that it will need