Reputation over Money

When I met the founder of a top private-equity firm, he told me: “Protect your reputation at any cost. You can recoup money if you act properly, but once reputation is lost it’s almost impossible to regain.” My mentors—legends of the finance industry—have always said the same, and they live by it.

Why does finance place such extraordinary weight on trust? I think it is because the business is built on information asymmetry. Whether in investing, lending, advisory or audit, one side inevitably knows more than the other. Reputation becomes the key tool for bridging that gap and lowering the hidden costs of uncertainty. Human judgment sits at the heart of finance, and human behavior doesn’t obey the laws of physics.

If counterparties can’t trust your word, deals collapse or never get attempted. So a successful financial firm must establish—and fiercely protect—a record of doing exactly what it says. Lose that standing and rebuilding it is nearly impossible.