Trust is a big deal in financial services and trustworthiness is one of the values financial planners and advisers will be expected to “demonstrate, realise and promote” under the Financial Adviser Standards and Ethics Authority’s recently enacted Code of Ethics.

So, it’s worth taking some time to define trust, provide some insights about whether clients think they can trust their planner/adviser, and offer some practical measures you could consider when building and maintaining trust with clients.

First, the definition. Trust is the degree of confidence a prospect or client has that you can be relied on to fulfil your commitments, be fair, be transparent, and not take advantage of their vulnerability.

Trust can take quite a bit of time to develop and it can also be destroyed quickly through unthinking actions or omissions. Everything you do in your business needs to be seen in this context.

I’ve been collecting data from clients of advice businesses for some time and, based on the latest survey responses (more than 1600 of them), the mean level of trust is 76 per cent. In light of the exposure throughout the royal commission, this is a pretty good result. Not perfect but also not a complete disaster. Clearly, there is an opportunity for advisers to step up and make trust with their clients a priority in the year ahead.

Here are some practical suggestions to improve the level of trust:

  1. Be sure you’re using ‘straight talk’ in your communications with clients. Be straightforward and honest in a respectful manner. Some ideas about how: Learn to get to the point quickly – and try to avoid spin; Be aware of your conversation; in the middle of an interaction, stop and ask yourself whether you are talking straight or spinning; and, if you are having difficulty talking straight with your clients, try to identify the cause. Is it fear – of the consequences or being wrong or hurting others’ feelings? Is it a desire for popularity? Identifying the cause will help you find a way forward.
  2. Consider whether you demonstrate respect for your clients. Think about how you treat your colleagues and family because this is likely to be mirrored in your treatment of clients. You can also think about specific things you can do to show clients you care about them (call, send thank-you notes or emails of concern). Don’t let there be a gap between how you feel and what you do.
  3. If trust is low, your clients won’t trust what they can’t see, so transparency in everything you do will establish or repair trust fast. Ask yourself if you are withholding information that should be shared with your client and why. Err on the side of disclosure. Don’t have hidden agendas and don’t try to hide information.
  4. If you or someone in your practice is responsible for making a mistake that affects a client, the mistake must be acknowledged quickly, a sincere apology must be offered, and you must go the extra mile to encourage a stronger relationship. This is critical. Taking action could mean providing a gift certificate or a subscription to a personal-interest publication. Don’t let pride get in the way of doing the right thing.
  5. Deliver results. Don’t just talk about what you are going to do for your clients, make it happen. Results give you instant credibility and instant trust. Do what you say you are going to do and deliver on time. Don’t over-promise and under-deliver. Make sure you thoroughly understand the client’s expectation – you have to know what results mean to the client and what they will value from you.
  6. You need to work continually to become a better financial planner and there are two sure-fire pathways to doing that.Demonstrate humility by collecting feedback regularly, and implement the changes that will deliver the best outcomes in terms of building trust with your clients. It’s also not a bad idea to thank the clients who have provided you with feedback and tell them how you plan to use it.
  7. Practice personal accountability. You need to focus on your own responsibility in any given situation. Clients want you to take responsibility for what lies at your door. Be open to being held accountable. This will increase the level of trust your clients have in you. That said, you should also have the courage to hold your clients accountable for their own actions/inactions based on the advice you provide them, because it’s not a one-way street.
  8. It’s really important that you keep your commitments to your clients. Assuming you have defined their expectations and made a promise to deliver something, the least you can do is deliver what you said you would, when you said you would. It’s the quickest way to build trust in any relationship. When you make a commitment you build hope, when you keep it you build trust.

When you are establishing a new client relationship, finding a value-added reason to make a commitment and keep it – and doing that over and over again – is guaranteed to build trust quickly.

I would go so far as to say that the presence of trust in your personal and business relationships is the equivalent of compound interest when investing. The more you invest and the longer you invest in building and maintaining trust, the more valuable your relationships become.

Ray McHale is chief executive and co-founder of advice consultancy and software-as-a-service MyNextAdvice. McHale contributes on using customer relationships to make smarter business decisions, exclusively to Professional Planner.  

Leave a comment