Back in 2006, if you told a financial services professional the market was going to take a tumble and the fallout would be a loss of consumer confidence in the industry, you probably would have been laughed at. But here we are in 2010, still feeling the effects of the fallout and wondering how we, as advisors, can get back on our feet.

To move forward, we need to pause for a moment and consider how we came to our current state, where consumer distrust is at an all-time high.

The Bernie Madoff scandal and others like it put consumers on edge, as did the news of bank failures and bailouts. When the markets shifted and the weaknesses of undertrained advisors and the incomplete plans they created for their clients were exposed, things got much worse.

The tipping point came as consumers realized they’d collectively lost trillions in retirement savings. With clients not wanting to own up to their own errors, financial advisors were blamed for the extreme loss in retirement savings. Ever since, we’ve been struggling to convince consumers that we are useful and needed members of the financial planning world.

The way ahead

So, what do we do now? The short answer is that change will have to come from within: Advisors must increase their capabilities to be comprehensive, able to do more and be more to clients to resolve all their problems. In other words, they need to become a “true advisor.”

A true advisor is an expert in multiple fields and disciplines. This takes a lot of hard work on the advisor’s part, but the benefits make the process worth the time and effort. The first step to becoming a true advisor is training in different fields in the industry.

Think about what pre-retired and retired clients might want from an advisor. They might need assistance with income, retirement and insurance planning, as well as investment management and expertise in estate planning.

Thus, learn more about areas with which clients and prospects might need help or subjects you may not know a lot about. Becoming knowledgeable in several areas and bringing comprehensive services to clients will help you address a client’s whole financial situation.

Being trained is a great first step, but securing the licenses necessary to support your new knowledge is a must. Again, think of what services a client or prospect might be looking for and work towards getting licenses that enable you to offer such services. The licenses I recommend acquiring include life, health, and long term care; Series 65 and either Series 6 or 7; plus Series 63. These are the basic licenses a well-trained advisor should hold.

A lesson consumers have learned in the past two years is to ask more questions of their advisor and to be more of a participant and less of a spectator in their financial plan. Dissuading consumers from asking questions or participating in their plan will cast an aura of suspicion around any financial representative.

Advisors should strive for honesty, transparency and full disclosure regarding solutions, recommendations and their compensation structure. Openness will help clients feel confident about their chosen advisor, starting the industry back on the right track.

Counting the benefits

The true advisor model comes with benefits as well, both for advisor and for client, including:

Fewer limitations. When clients come to you, they are most likely looking to resolve a single concern, say providing for their family in the event they die unexpectedly. If you’re centered on one product or service, you will be limited to resolving an issue within that one service or product realm. However, if you broaden your scope, you can offer solutions to other financial concerns, thus providing comprehensive advice, conveniently in one location.

No quotas. A problem our industry has created through fierce infighting has been forcing sales quotas on advisors, turning them into product pushers. Becoming a true advisor eliminates the obligation and/or pressure to conform to the stipulations set by an overseer, allowing plans to be created and tailored to a client’s unique needs.

Increase in business. Boosting service offerings will naturally increase business. The pairing of better solutions for clients and a larger client-base yields 2 other benefits: a spike in referrals and the chance to create long-lasting client/advisor relationships. By working with clients for the duration of their lifetimes, you can offer more products and services, allowing you to increase the amount of business you do per client.

No fear of changes. The increased flexibility that comes with multidisciplinary licensing permits advisors to be more resilient to change, as they won’t be impacted as greatly. That allows for acceptance of change rather than fear.

A bonus for the industry

The advisor community benefits from the true advisor model as well. Advisors who add multiple areas of expertise to their arsenal will help reduce the bickering among financial service professionals who hail from different disciplines. The added expertise will also yield superior advice, happier clients and regained trust.

Dean Zayed is the president of Brookstone Capital Management, Wheaton, Ill. He can be reached at dean@brookstonecm.com.