Can I Trust my Financial Planner?

The finance industry, like real estate, food, building, medical and health, has had its fair share of rogues. Unfortunately, as we see year in year out with ‘Most trusted Professions’ surveys by the likes of Readers Digest, one bad apple can and does spoil the lot. Financial Planners continue to sit in the least trusted professions grouping, and there are plenty of individual planners and dealer groups who just don’t deserve to be there. 

Not only do the ‘bad guys’ impact the industry reputation, but it also contributes to the ridiculous amount of legislation that the finance industry has been pounded with for years now. I know, having been in senior Compliance and Risk Management roles in the Finance industry for over 14 years. I actually got sick of being the constant bearer or more bad news – another legislative requirement everyone has to follow that, frankly, only existed because someone else had done the wrong thing by consumers.

In the end I left that career and decided to get on the front foot, the pro-active end of things and start teaching people in business, and in their relationships, how to trust, how to know who to trust, and how to build trust with the very people they want to develop and maintain relationships with.

Now, when we’re talking about financial planners, you are trusting them with your future. If they get it wrong, all the dreams and plans you had go down the drain. The need for trust is high, so it’s worth the effort to get it right. Interestingly, from studies I’ve done, liking someone is not the same as trusting them – in fact, only one in ten people will deal with someone they like but don’t trust, and rightly so.

If you are financial planner, take note – you need to get people to trust you, not just to like you. If you are looking for a financial planner to help you achieve your lifestyle goals and protect your future and the future of your children, you need to find someone you can trust.

There are actually qualities of a trustworthy person that can be assessed when you are dealing with someone. Here’s my model of a trustworthy person:

A trustworthy person will display all these qualities most of the time. You might know someone who is very honest, but keep promising things and not delivering – they don’t walk the talk. It’s hard to trust them in the end.

When seeking a financial planner, you need to ask yourself these questions:

1.     Are they open and transparent?

Have a few questions upfront to ask them when you meet them. Do they answer you openly or seem as if they could be hiding something?

What are their fees and commissions? You want to be sure that they are recommending the best thing for you, not them.

2.     Are they honest and have integrity?

Some people have lying down to an art form. Some general things to note:

• If it sounds too good to be true, it usually is
• If they can’t back up their claims with some kind of evidence, there could be a problem
• If you feel like something’s not right, be careful
• If they try to force you to make a decision when you’re not ready, don’t

If for whatever reason you are not sure, gather what information you can and take it home to have a think about it first.

3.     Are they genuine and authentic?

You can usually spot a fake. Often there will be something that doesn’t gel, some kind of inconsistency between what they say and how they look, dress, or act if they are not genuine. We often get a sense about this but can’t put our finger on what’s not right. If you sense something, go with that.

4.     Are they courageous and decisive?

Are they prepared to stick up for what they believe? They should be very clear about why what they are suggesting is the right thing for you, and be happy to make recommendations about what you should do. If they seem unsure themselves, think twice.

5.     Are they reliable and proven?

Were you referred to this person by others who had a good experience? Have they delivered on their promises to you so far? Have they proven themselves over time, or have other credible sources validated them in some way? If not, do your homework. Ask yourself ‘What has this person done, or what have others said that would make me believe them?’

6.     Are they caring and empathetic?

Are they really thinking about what’s best for you? If they care about you, they’ll take the time to understand you, what your concerns are, and they may even suggest other people you might like to talk to before you make your decision.

Now, if you gave each person a rating out of 10 for each quality pair above (1 being ‘not at all’ and 10 being ‘very much so’ ) here’s what I suggest:

If they rated 1 – 3 for any of the qualities, find someone else to help you. They’ve got some work to do before they are worthy of your trust

If they rated 4 – 6 for any of the qualities, shop around. There’s a reasonable chance something will disappoint you at some stage of the interaction, them personally or the advice they give you

If they rated 7 – 10 for each of the qualities there’s a good chance this will work out for you, provided you are clear about your own goals

You’ve worked hard for what you have now. You need to find someone you can trust to help you make this work for your future. Remember, your trust is fragile – handle it with care.

Vanessa

Vanessa Hall is Australia’s leading expert on trust. Her business, Entente Pty Limited (www.entente.com.au) teaches and supports organisations and individuals to build trust in businesses, homes and communities around the world.

Take care

Vanessa