How to Build Your Clients’ Trust as a CFP®
One of the most important aspects of being a financial planner is figuring out how to build trust with your clients. When your clients trust you, they’re more willing to accept your advice and recommend your services to their friends. Knowing that your clients trust you is a sign that you’re doing something right, and it’s one of the most satisfying aspects of this profession.
So, how can you help your clients trust you? If you ask this question in some places, like CFP® forums or Twitter, you’ll probably see one prevailing opinion: choose the right fee model. Many people in our profession will state that the best (or only) way to make sure your clients trust you is to use an advice-only fee model.
While I agree that there are benefits to a fee-only model, I don’t agree it’s the only way to build trust with your clients. Moreover, I don’t believe it’s the right solution in many cases. It’s much more important to find multiple ways to build trust with your clients.
A fee model isn’t the only option
Discussions about building trust with financial planning clients often focus entirely on compensation. The common argument is that using a fee-only model is the best way to engender trust because it’s built on transparency. Clients know exactly what they’re paying for: your advice. Fee-only advocates insist that this model ensures that a financial planner will always act in their client’s best interest and avoid trying to sell them certain products to make a commission.
There are some merits to this opinion. Many clients enjoy the transparency of a fee-only model or believe that commission-based services automatically lead to a conflict of interest.
However, believing that trust is entirely based on a fee model is a very narrow-minded approach. It’s also an extremely privileged response that fails to address the unique needs of many planners and their clientele.
A fee-only approach isn’t always practical. It often works well for six- and seven-figure clients who are happy to pay for investment advice, but it leaves out countless other clients with different needs.
For example, a brand-new financial planning client who’s just starting out might not want investment advice. They might just need to purchase life insurance, which is only possible with a commission-based transaction. Insisting on a fee-only model often prevents planners from being able to address their clients’ unique needs.
The financial planners who offer commission-based products to the clients who need them are serving their clients well! Saying that they’re untrustworthy simply because they aren’t using a fee-only model is short-sighted at best.
Communication and service
The way you earn money can affect your clients’ feelings about you and your advice. But your fee model isn’t the determining factor in whether your clients trust you. There are so many other ways to build trust, many of which revolve around communication and customer service.
You can encourage your clients to trust you by listening to them and taking the time to really understand their situation, needs, and goals. And it’s just as important to communicate well: give advice that’s practical, relevant, and easy to understand. Think about what you can do to give your clients the best possible service, and then commit to doing those things.
Thoughtfulness and reliability
Sometimes building trust is as simple as being thoughtful and compassionate. When you focus on truly serving your clients as best you can, you’ll automatically build trust with them regardless of the fee model you choose.
Helping your clients shows them that they can trust you! Take the time to truly listen to their concerns, and then develop specific solutions to address those issues. Show up for your clients, and do what you say you will do.
Trust isn’t defined by a fee model
As financial planners, we need to gain our clients’ trust. But choosing the right fee model isn’t the only way to do that. Yes, a transparent advice-only model can show a client you’re acting in their best interest. But so can listening to them, helping them, and communicating well with them.
If you’re just focused on your fee model, you’re missing out on countless other ways to gain your clients’ trust. A far better approach is to look at your relationship with each client and figure out what you can do to help them to most, even if it includes selling commission-based products.
What’s the best way to build trust with your clients? Add your thoughts in the comments!
Excellent customer service is the foundation of trust for many clients. One of the best ways to improve your skills in this area is to learn from the experts. Amplified Planning CORE allows you to watch top financial planners in action as they meet with real clients. You can see how they interact and address each client’s unique needs. Plus, CORE gives you the chance to earn CFP® experience credits. Find out more about AP CORE to see if it’s right for you!