Financial Advisor IQ, August 2, 2016, R.A. Monroe - Establishing Trust in an Untrusting World


After years of negative headlines, it’s not altogether surprising that consumers might not be as trustful of the financial services industry as they were in days gone by. Trust is an ephemeral quality that’s difficult to quantify, but advisors who don’t work to establish it do so at their peril — particularly because trust is the number one criteria clients look for in a financial professional, according to a 2015 Spectrem study.

“Clients are more scared to commit today because of what they’ve seen in the news,” saysWinnie Sun, managing director and founding partner of Los Angeles-area Sun Group Wealth Partners, which manages $150 million. “They can also feel paralyzed when it comes to making investment decisions because of information overload. It can be easy for them to find an excuse to not get their finances in order, and to not meet with an advisor.”

Rather than presuming that clients will trust them, Sun says advisors need to be proactive about establishing themselves as someone a prospect can relate to and rely on.

That may mean putting in more work on the front end, but doing so tends to pay off — in part because the foundations of the advisor-client relationship are laid before a prospect steps foot in your office.

“We’re very active on social media, and we use things like podcasts, videocasts, and public speaking events,” Sun says.

Doing so means prospects have a sense of the firm’s “voice” even before the initial meeting takes place, and that they’re engaging with the firm because they already feel some sense of affinity — which goes a long way toward establishing a sense of trust.

“Trust comes with transparency, openness, candidness and mutual respect,” says Paul Ruedi, CEO of Champaign, Ill.-based Ruedi Wealth Management, which manages $190 million. Financial professionals can establish a tone of honesty and reliability starting with their website, which is often the first place a client will “meet” an advisor.

“If an advisor’s website doesn’t clearly communicate who they work with — 'Is it people like me?' — and how they charge in detail, I think it shows they are not willing to be open with people,” Ruedi says.

But it’s not just clients who should be concerned with trust; as any advisor who has been burned by not-entirely-upfront clients could tell you, it’s just as important for you to feel as though you have a solid, dependable relationship with a prospect. Ruedi says he pays attention during the first couple of meetings with a client to see “if they are open about their desires and, just as importantly, their fears — if they allow themselves to be vulnerable.”

While the early stages of the advisor-client relationship lay the foundation for trust, establishing your credibility and reliability doesn’t stop there, says Bill Davis, a financial planner with Newtown, Pa.-based Prism Advisory Group, which manages $135 million.

“Even clients with whom you have a decade-long relationship, trust is something that you continually build through honesty,” Davis says.

Although it may seem contradictory at first, Davis says that one of the best ways to establish confidence is to admit when you’ve made a mistake. While some advisors might shy away from doing so because they don’t want the client to see them as fallible, clients understand that advisors are human.

If you admit a mistake as soon as it’s made and then do your best to fix it, you’ve let the client know that you’ll treat them in an upfront, honest way.

“Advisors should keep in mind that old saying, ‘It takes a lifetime to build a good reputation, but only a minute to lose it,'" Davis says.


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