Four Ways to Measure Trust With Your Financial Advisor.

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posted on Thu, May 11, 2017

Thanks to Al Gore and the invention of the internet I’ve pulled up a quote from William Shakespeare. In his play, All’s Well that Ends Well, he says, “Love all, trust a few, do wrong to none.” I couldn’t have said it better myself!

Trust is paramount, not just in finding a financial advisor, but also in life. If you really think about it there are very few people you can trust on a high level. We all know trust is scarce and extremely hard to earn, but every financial advisor throws it around like the t-shirt cannon guy at a basketball game. I want to earn your trust, I want to be your trusted advisor, trust me, trust me, trust me!!!

I believe most financial advisors have good intentions and want your trust. Going back to Mr. Shakespeare’s quote, we can and should love them, but should we trust them? I don’t expect any of my clients to trust me unless I can demonstrate tangible reasons for them to do so. Here are four ways I try to earn my client’s trust:

  1. Benchmark Investment Performance – I wrote a separate blog just on this topic. You can read more HERE if you like. In a concise and simple manner, I like to show my clients their net investment performance (after all fees) relative to their expectations and how they could perform without an advisor. An 8% return could be great for some clients and awful for others. Your advisor should give you context (not spin) to your investment performance. The stock market being down, Trump getting elected and market timing is spin not context.
  2. Just the Facts – I view all my clients as family and often our conversations cover a variety of topics outside the scope of financial planning. But when it is time to discuss their financial situation, as my dad used to say when someone would start to ramble on I “get in and get out”. Ask yourself, would you rather have a fancy and colorful 50-page report filled with graphs and charts or a 2-page report that illustrates just the items you want to see? Think context over spin.  And ask yourself why your advisor is not just showing the important facts.
  3. What are you paying – You should always ask how your advisor gets compensated. As I like to do, I have written another blog just on this topic HERE if you want to read more. In short, your advisor is either getting paid directly by you in the form of a fee or is being compensated from a product being sold to you. I would suggest that your goals and expectations are in line with the advisor’s compensation structure.
  4. Two Way Relationship – Is your advisor just giving their thoughts or do they actively solicit your opinions and ideas? Are they okay with you pushing back and asking tough questions? Think of all the trust relationships you have. Are they one sided or is it a two-way street?

I can’t emphasize enough that I believe almost all advisors have the best intentions and want to earn your trust. What I am trying to illustrate is the difference between love and trust. We can love everyone, like Shakespeare suggests, but trust needs to be earned. I hope this was helpful. Please feel free to contact me anytime to discuss this topic or any other in more detail.