We celebrated our 10th anniversary this year, and wouldn’t you know, that “10” motif just kept popping up. Robert Abboud offered up 10 tips on establishing client trust.
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10. Eat what you cook
Any advice I give to clients is the same advice I follow myself. We have to walk the talk if we expect to be trusted professionals.
9. Stick to your principles and philosophy
If you strongly believe in Value or Growth or a blend etc., don’t veer from your principles. I still recall the pressure from clients to invest in tech back in 1999-2000. We advised clients who wished to do so to seek out another financial advisor. We lost one client but have the greatest story to tell for the rest of our careers. The one client who left had a portfolio of approximately $400,000, transferred it out to a discount broker and proceeded to invest in Nortel, JDS, RIM, etc. In less than 6 months, her portfolio was down to well under $50,000. This is a story we share with clients and prospective clients any time they want to only invest in what’s hot.
8. Offer holistic advice
Help clients with important decisions such as their real estate options. Should they lease or buy? Is a condo or freehold home best for them? Helping clients in all areas of their finances allows you to be their trusted advisor for important decisions. Last week a client of mine called to say she was buying a condo. I asked her if she had negotiated on the price. She hadn’t. I advised her to let the seller know that her financial advisor reported back that said she could not afford the asking price and requested the price be dropped by $10,000. In the end, she paid $3,000 less but that’s $3,000 of concrete value we helped our client with and they won’t soon forget that.
7. Disclose how you get paid
Showing your clients your fees is crucial to establishing a trusting relationship, regardless of what structure you use (fee-based, DSC, front end, etc.). It’s important to let the client know how and how much you are being paid. This puts everything on the table and clarifies the relationship.
6. Make regular 90 day calls
Contact your clients every 90 days to see how they are doing and if you can help them with anything. Many times these are simply opportunities to strengthen the relationships and sometimes it turns out they need advice on whether to buy or lease a car or discuss a bonus they will receive in 2 weeks. It shows clients you actually care enough to call them for non-financial reasons.
5. Hold regular reviews
Make the most of your annual or semi-annual reviews with your clients. Cover all topics including: retirement, insurance, estate, investments, kids’ education, upcoming expenses and other life goals. We use our Client Dashboard in our reviews to show clients how they are doing in achieving the goals that we have incorporated for them. Clients feel great to leave with a document that shows them on one page how their finances are doing.
4. Use agendas in your meetings
Establish a system and process for your meetings with clients. Use agendas and check lists for each meeting and follow up with a summary email. This provides a record of actionable items for you and your client.
3. Provide clients with a financial plan for a fee
Recent polls indicate clients desperately want financial plans so they can have an idea how they are doing. We will only take on new clients if they have a full plan completed. Whether they have $200,000 or $2 million dollars in assets, all clients need a financial plan. Click here to view a sample of our plans.
2. Charge a fee for your services
This will differentiate you and will put a value on the services you offer. Clients will begin to see you as a professional and not a salesperson.
1. Always do what is best for the client
We are faced with conflicts of interest on a daily basis. Keep the pension or transfer the commuted value, pay down the mortgage or invest the monies. Obviously, there is an incentive for us to recommend investing assets but that should not even be considered when determining the appropriate course of action. Number One rule — always recommend what is in the best interest of the client, even if they want to do the opposite. I have several clients who wanted me to transfer the commuted value of their government pensions back in 2006-7. However, when we ran the comparisons, keeping the monies in the pension plan was the most prudent and beneficial thing and I stuck to my guns. In 2008, those clients were very grateful to have retained their defined benefit pensions and proudly tell their friends the story how we stayed the course and how they appreciated that.