FECIF - The European Federation of Financial Advisers and Financial Intermediaries

Editorial - June 2019

Olivia GeldenhuysOlivia Geldenhuys
PortfolioMetrix Head of Support, Europe

Trust – the cornerstone of financial advice

There’s a quote that says, “Trust takes years to build, seconds to break, and forever to repair”. This is nowhere truer than in the financial world, where a person’s quality of life relies on decisions made by the experts in whom they place their trust.

As a financial adviser, your ability to build trust translates into composed clients and is the foundation upon which you grow your business. It’s useful to recognise the behavioural traits that underpin trust. Over the last seven years in my role at PortfolioMetrix, I have worked with top IFAs to understand how they succeed in their business. I have observed their approach to client relationships and in turn have learnt how to develop my own relationships with them.

From my experience, I have identified four key elements that appear to be essential to establishing trust: authenticity, competency, consistency and empathy. These elements govern the confidence clients have in the financial planning ecosystem.

Authenticity is at the heart of building trust. It’s one thing to claim a value proposition, but does your business behaviour stand up to this under scrutiny? Your clients will not simply take what you say at face value but will form their own opinions through their direct experiences.  Our clients hold a mirror to us, which either confirms or rejects what we think we are projecting. Authenticity requires us to be humble about our abilities, be open to learning opportunities and patient in achieving our selected goals.

Competency is critical to establishing confidence in what you say and that it can be relied upon. Competency is a function of skill, your experience and the rigour of your logic. Your competency needs to be of high quality and communicated effectively. Clients value your expertise and rely on you to help them understand sometimes complicated concepts. This is true for the adviser/investment manager relationship too. We need to ensure that every investment decision is made in a robust manner that can be simply communicated. The effectiveness of our ability to project competence underpins confidence in us.

Consistency is about the messages you deliver to your clients; it requires that you are upfront, accurate and transparent in every area of your business. In demonstrating that you are authentic and competent, it is critical that you deliver this message in a consistent manner, every time. Consistency provides comfort to your clients and projects reliability.  When it comes to investment management, consistency is important not only in building confidence and trust with clients but also in achieving predictable outcomes.

Last, but by no means least, empathy is the catalyst that takes relationships above a technocratic level. Establishing rapport creates a safe space for clients. Your relationship with your clients will succeed or fail based on your ability to not only understand and interpret their needs and circumstances, but to identify and relate to them. Innate empathy is what makes so many financial advisers good at what they do. At PortfolioMetrix, we constantly think about what we do from the perspective of our clients and adapt our actions to reflect their needs.

There is a golden thread that runs through these key elements, which is so integral to building trust in a financial advice business. The greater the trust relationship, the greater the value created and the greater the impact we have on the lives of clients and, importantly, our own self-esteem and sense of achievement.

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