Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

The trusted advisor: Are you one and how do you prove it?

Your article was successfully shared with the contacts you provided.

Plagued by years of controversy, corruption and public backlash; the financial services industry struggles to prove that the “trusted advisor” is more than a myth. In the post-Madoff era, it has become progressively more difficult for advisors to earn trust from their clients and prospects. Can you blame them? The most recent article I read announced the resignation of the CFP Board chairman amid an ethics probe. I don’t think I need to point out that the CFP has a history of upholding a high standard of ethics and excellence for financial advisors, as seen in the recent “Let’s Make a Plan”, campaign. 

While one person’s actions do not reflect the behaviors or actions of their peers, it may cast doubt in the minds of the general public. The old saying “one bad apple can spoil the bunch” isn’t far from the truth in this case because of the ability to tarnish the perception of the profession. With headlines featuring Ponzi schemes, excessive compensation for banking executives, advisor fraud, and the list goes on; it’s no wonder the average investor is resistant to put their entire life savings into the hands of someone they barely know. So, how do you establish trust in a world that seems to find every opportunity to prevent it?

Proving that you are trustworthy as an advisor is a long and arduous process. It requires time, patience, persistence, and above all else, integrity. Here are five ways I believe you can prove you deserve to be labeled a “Trusted Advisor.”

1. Remember the client always comes first! There has been much debate in the industry regarding a uniform fiduciary standard and discussions about the various compensation models. Regardless of which side of the fence you fall on this debate, it doesn’t change the fact that an ethical financial professional should always put the client first. How you get paid should have no bearing on how you treat your client. 

2. Teach your clients and prospects how you are going to help them plan for retirement and achieve their goals. However, keep in mind that whatever you tell them you are going to do, you had better do it. Don’t make any promises you can’t keep. Also, educate your clients, don’t just offer them solutions. Empower your clients by educating them. Take your time, walk them through the planning process and ensure that they know exactly what you are doing for them and why you are doing it. 

3. Understand the needs of your clients or prospects and provide them with the necessary information to help them make the best decision for their situation. Do this even if that means that you won’t get their business. Understanding the wants and needs of your clients and prospects is essential to your success as their advisor. This will require that you ask questions to help them better understand their needs and what is possible, but also listen to their responses. Don’t enter the conversation with preconceived notions that you know what the client or prospect may need. Through this process, you will occasionally find yourself across the table from someone who may not be a good fit as a client for your business. Understanding this is important. Treating this person with honesty and integrity may result in a referral sometime in the future.  

4. Show clients and prospects that you care. Once you make someone a client, it is your duty to continue to show them you care. Keeping a client requires work. You must continuously provide them with exceptional service in order to differentiate yourself from your competition. Remember, your staff and the support that they provide for your clients are an extension of your reputation as their advisor. Make sure that you surround yourself with the right people. Anyone who doesn’t share your vision or commitment to your client could be a detriment to your practice. In addition, maintain open lines of communication. Meet regularly with clients based upon their needs, provide ongoing education and support through blog posts, e-newsletters, birthday cards, etc.

5. Focus on your professional development, educate yourself on changes in the industry and advance your education. Despite the recent announcement regarding the CFP Board chairman, the designation still remains valuable for a financial professional. The necessary skills and education alone will help you to develop and provide more comprehensive solutions for your clients. The CFP along with other industry-wide approved designations are more than just the alphabet soup after your name; they prove that you are focused on your personal development. Not all designations are created equal, so do your homework to ensure that the program is accredited and industry approved.

Trust is something you feel in your heart and mind. There isn’t a universal method for building it. You simply have to be yourself, know your audience, earn their respect, and put in the time to build trust. Live your life and run your business with integrity. If you do, your audience will notice and reward you for it.    

For more from Todd Greider, see:

4 bad habits that stunt your business growth

The money taboo

4 reasons you fail to attract and keep female clients


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.