Worthy of Belief

The Financial Planning Association recently released an extensive whitepaper written by the MQ Research Consortium and the Kansas State University Personal Financial Planning Program.

The whitepaper, titled Developing and Maintaining Client Trust and Commitment in a Rapidly Changing Environment, updates a study from 15 years ago that examined communication best practices and how they impact the trust and commitment clients have in their planners.

The authors of the original study defined “client trust” as follows: The belief of the financial planning client that the financial planner can be relied on to behave in such a manner that the long-term interest of the financial planning client will be served.

I believe that there are three core components of trust: credibility, reliability, and motivation.

The word credibility comes from the Latin word credibilis which means “worthy of belief” or believable. Credibilis itself is based on the word credo which means “I believe.”

When it comes to people, credibility answers the question, “Does this person know what he or she is talking about?”

Clients want to know that their financial planner has the knowledge to serve their long-term interests. Additionally, they want the planner to have the right experience to apply that knowledge correctly.

In his article on Forbes.com, Tim Maurer writes that early in his career, he was “operating under the assumption that bringing knowledge where it is lacking is an advisor’s primary value.” As his career progressed, he discovered “it was the ability to apply knowledge, to help clients make a this-or-that decision, that was really where an advisor could demonstrate his or her worth.”

Here are four specific action items you can take to improve your credibility:

  1. Develop an ongoing education plan to expand your knowledge.
  2. Create shareable stories and case studies that describe your experience in solving client needs.
  3. When meeting with clients and prospective clients, look for opportunities to demonstrate your understanding and ability to serve their needs by listening intently and asking great questions.
  4. Practice sharing your knowledge so you can speak with confidence and conviction.

I’ll explore reliability and motivation in the coming weeks. Stay tuned!

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