“Ten rules for a trust-based relationship”

“Ten rules for a trust-based relationship”

Trust is a word that is frequently associated with financial advice, and unfortunately it’s often for the absence of it.

When a consumer decides that they will seek advice, the most important factor to them when choosing their adviser, by a margin of more than two to one, is trust. And yet when we consider the reality of trust – away from the rhetoric and the assumptions that are bandied around freely by all who have an opinion on the advice profession, it can be a difficult position to establish, and to maintain.

We do a lot of work with advisers to improve their engagement skills with their clients. The greatest advisers –those who enjoy successful businesses and relationships, even those with decades of experience, recognise that their client engagement skills are the key to enabling their success, and are therefore skills that are worthy of focus and review on a regular basis.

With that in mind, we thought we’d share our ten rules for a trust based relationship. All of these rules appear on the surface to be common sense. In fact, some of them are blatantly obvious and bordering on offensively condescending – and yet they deserve true and focused consideration. Why not reflect on the last three meetings you held with clients, and consider what their thoughts would be as to whether or not you played by the rules…:

1. If you don’t know something, say so! Yes, clients are coming to you for certainty, but no-one expects you to know everything. People would much rather you say that you will confirm your understanding of a matter, and will come back to them with the answer.

2. Don’t ever lie. Never, ever, ever. While this appears to be one of those offensively obvious rules that attract indignation from good advisers, consider that lying by omission is still a lie. Make sure that your client has all the information they need to make a decision.

3. Clarify, qualify and quantify your client’s wishes. Never make assumptions about what they are saying. English is a language that can be easily misconstrued, so train yourself to ask the right questions, and keep exploring until you’re satisfied you truly understand the issue at hand. If you are still unsure about something when debriefing or file noting after a meeting, call the client for clarification.

4. Demonstrate respect. Appreciate that people come from different cultural backgrounds and belief systems. If your values clash too strongly with a potential client’s, then do not take them on.

5. Confront reality. If a client has unrealistic expectations or perceptions, let them know with empathy, and yet honesty. Illustrate the problem with evidence to back up what you are saying, and soften the blow with suggestions on how to work around the issue.

6. Always give your client the best advice. Again, seemingly obvious, and yet a rule that can be easily bent. Look to the long term relationship, not the short term potential. A client will be of more value to you over ten years instead of two, so if the best advice is to do nothing right now, then give it. If that advice means not taking on a retainer-paying client, you may enjoy more benefits from referrals they send or the strength of your relationship when they return for future advice. Not to mention the prevention of dealing with them as a disgruntled client a year or two down the track.

7. Always be up-front about fees. Make sure that your client understands the details of all the fees they will be charged, including the breakdowns of platform versus management expense ratios versus advice fees. Never wait for them to ask about fees.

8. Don’t cover up mistakes. Irrespective of whether the error was on the part of yourself, your staff, or a product provider, openly acknowledge it and demonstrate your commitment to fixing it. Taking responsibility for the outcome will engender far more trust in you than blaming someone else for the issue.

9. Deliver results. Always do what you say you will for your client, whether this is calling them by Friday or keeping them accountable to their goals.

10. Don’t under promise and over deliver. Contrary to popular theories, eclipsing expectations is just another way of not being genuine with your client. Delivering your SOA by Wednesday rather than Friday is fine, but extras designed to impress often become expected.

Overall, it is pretty simple, and yet sometimes one – or a series of small – misunderstandings or incidents can erode trust.

Sue

 

Sue Viskovic
[email protected] | Facebook | LinkedIn

Sue Viskovic CFP is the Founder of Elixir Consulting; a proud mother of four; a sought-after speaker; a business coach; and author of a number of books and programs designed for advisers. An active contributor to, and advocate of, the financial advice profession, Sue is passionate about the important role that quality advice can play in society.