The key to successful Financial Planning: Establishing trust with your clients

by Kimberley Malin

It could be said that the trust built within the client – Financial Planner relationship is more important than the actual portfolio a client is invested in, and the returns it has or hasn’t achieved.

We know it’s not as simple as that, but let’s dive a little deeper into this and explore how and where trust fits into the relationship between the Financial Planner and their client.

Trust is a complex and subjective concept that can vary from person to person – it is not something that can be easily quantified or purchased. Trust is built and broken based on individual perceptions and experiences. With each individual potentially having an alternative definition and expectation of trust, it is important to understand and respect these differences in order to establish and maintain trust in any type of relationship.

Trust can indeed be seen as the ability to rely on someone and have confidence that they will fulfil their commitments. It is closely tied to emotional processes in the brain, but it is not always absolute and can vary in different situations. The level of trust placed in someone may depend upon various factors such as past experiences, context, and individual perceptions. It is important to recognise that trust can be situational and may differ in different circumstances.

How can the Financial Planner build a trusting client relationship?

First and foremost, I feel that trust starts with the Financial Planner’s behaviours. The Financial Planner needs to be genuine and behave in a manner that fosters the ‘trust’ they are trying to build.

A Financial Planner needs to essentially do the things they say they are going to do.

Communicate in the client’s preferred communication method.

Meet the deadlines they have set.

Be open and honest.

Be prompt in response and to meetings with the clients.

This is all before they have even researched a portfolio or made any product recommendations. The relationship starts as soon as the client makes the initial contact with the Financial Planner and/or the Financial Planning firm.

The client may wish to work with a Financial Planner who has shared values. The client may ask the rhetorical question – “Would the Financial Planner do the same as me in that situation?”. After all, somewhere on the list of reasons why a client would trust a Financial Planner is that the client needs to be able to ‘trust’ the Financial Planner with their life savings as well as their goals and dreams.

So, what happens when things go wrong?

What happens when the client’s Financial Plan goes off track and the Financial Planner needs to deliver not such great news during a forward-planning review?

If the trust has already been established, the client ‘should’ trust the Financial Planner with the information / advice that is being delivered. The client should be able to trust that the Financial Planner has the client’s best interests at heart and with the action going forward.

The Financial Planner may advise the client this is just a ‘blip’ in the market due to current economic conditions. However, if the trust is only skin deep, does the client really trust this to be true?

So, this moves us onto the question of ‘how do Financial Planners maintain and/or enhance this level of trust they have built with the client?’.

Well, all of the above, of course, but also the Financial Planner needs to educate their clients, coach them, prove to them that the investment philosophy is one they would happily invest in themselves and stand by, even during market downturn, and framing all of the advice given around their bespoke goals and objectives.

I am sure there is an array of ways you think that trust can be maintained with a client, but the main point here is that Financial Planner need to ensure their advice is tailored, holistic and bespoke. The client needs to feel that the advice they are getting is 110% focused solely on them as a unique client – from a Paraplanner’s perspective myself, this is absolutely plausible, and I would deliver nothing less in the Recommendation Reports I write.

Clients deserve the very best advice and service because at the end of it all, they have come to you for a better understanding of their finances, to place their trust with you because they need help to create a financial plan that helps them achieve their goals.

Trust is a critical part of the world of financial planning. I will leave you with a quote that has always sung to my own heart, and I echo in my own daily work.

“Wrong is wrong, even if everyone else is doing it. Right is right even if not one else is doing it.” (Unknown source).


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