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How To Build Client Trust

By Taylor Liao, CFP

It’s premature to call financial planning a profession in Taiwan. A client today in Taiwan will receive name cards with the title of the so-called “financial consultant” from many sources–insurance companies, banks or even loan companies. It’s not easy to make ourselves distinguished for our profession.

How do you earn the trust of your clients? In my opinion, it’s our responsibility to build the trust of our clients. Since our clients can’t tell the difference between a financial planner and other sales, how can they respect our profession?

Financial planners should add something into our planning processes that will help us to earn client’s trust step-by-step. Here are some tips that we are doing right now to forward this process.

Make Sure the Client Knows What You are Doing

The most basic step to earning a client’s trust is to let them know what financial planning is. In the first interview with a client, no matter whether he/she was referred by another client or not, the first thing we should do is talk about what financial planning is and how this will help him/her. Instead of talking too much, we need to ask questions and listen. One question we should ask is: “What’s your idea regarding financial planning?” The client may answer: “Financial planning will help me better understand my financial status.”  We should follow up by asking “Why do you think it’s important for you to understand your financial status?” and so on…etc.

We have a logical process of asking and gathering information from our client that follows this flow: ask-listen-speak-conclusion-confirm. We let them speak out their idea of financial planning first. When asking these questions, we should always remain neutral. We don’t ask a guided question such as: “Financial planning will help you to achieve your goals, what’s your opinion regarding this?” That will lead clients to a biased impression that financial planning is good for them.

We allow the client to tell us about their problems in balancing income, expenses and achieving goals. Once they have awareness of how to improve their situation, we confirm by asking: “So do you think it’s important to find a way to change your situation now?” Only at this moment, should we start to talk about what financial planning is. You may notice that through this logical process, the client will know what financial planning is and how it can help them.

Deliver our Mission and Passion of Being a Financial Planning Professional

How does your client rate you as a financial planner? My company did a survey in 2009, associated with the Human Resources Company and magazine. This survey asked the people who attained the financial planning course: “What do you think a “financial planner” is?” The statistic was:

  • 75% think it’s some kind of sales job for a bank or insurance company
  • 10% said that it is a fraud of the financial sector
  • 10% said that it may be a job of financial advisory

It’s true that the client can’t tell the difference between us and sales from other channels. If we can’t make ourselves distinguished for our profession, how can we earn trust from our clients?

So, based on the statistic above, financial planning professionals need a procedure to let our clients know what a financial planner is. One way to do this is by sharing our mission and passion of being a financial planning professional.

We may choose a topic that is familiar to most clients or tell a story from past client experiences. I used to tell the story of one client who had bought a Lehman Brothers Structure Note. The information that he received was that it was the same as depositing cash in the bank. He couldn’t believe that the principal had dropped 80% half a year later. Then I asked the client: “How do you feel about that? Do you feel that you were just sold a product and that they didn’t care about your needs?” If their answer is yes, ask them “What’s your opinion of being sold in this way, do you feel good about this?” Or do you prefer that you have an advisor who will know your goals, your needs and then choose an investment tool to help you to achieve those?

I say that our mission is to be independent advisors. Why do we still insist on and keep the enthusiasm of this profession? The answer is because we have seen the confusion of this environment and we try to be an independent third party that improves it. When offering products or services to our clients, we should try to erase the information asymmetry. We should inform them of the advantages and also show them the potential risks. Instead of just selling a product to our clients, we should help them to achieve their goals by long- term management.

Be Honest to all Clients, Don’t Sell Anything That You Wouldn’t Buy Yourself

A few years ago, some of the insurance companies here tried to push their clients to do a policy change. The clients were convinced to change their policies from a Whole-Life Policy to a Unit-Linked Policy. This would erase the burden of insurance companies to prepare the liability reserves. And the salespeople were happy to create new business from old clientele. The problem was that the Unit-linked Policy increased the cost of insurance. For those who cared about their face amount protection, they found out that the cost was quite high as they aged. For those who cared about their cash value, they would realize that the value changed from when they purchased. This was because the cash value was based on the return of their investment; no more guarantees, as usual. Unfortunately, only a few salespeople told these disadvantages to their clients, and that caused a lot of dissension, later on.

At that time I was a sales manager in an insurance company. I knew the policy change would bring me more business, but, I didn’t push it to my clients because I could not convince myself that it will be good for them. Our clients trust us for the reason because we are on their sides. They watch what we are doing and what we are not doing personally.

We are in a special industry. We develop a client and make a plan for them, but the relationship is not over after they pay us the fees. On the contrary, it’s just the beginning of our partnership. It may not be easy to earn their trust but, if they trust you, they will treat you like a friend or even family and they will make referrals for us voluntarily. So why not try to improve a little, and get more trust from our clients?


1 comment to How To Build Client Trust

  • Jennifer Wang

    Dear Taylor,
    Your photo looks great, and your article is very tasty. I also like the previous one about telling story in Taiwan. We are lucky to have you as the CFP pioneer in Taiwan.Thanks for introducing AFA to me. We can definitely expect its success in near future. Jennifer

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