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Financial Trust: What Clients Are Really Looking For

Jae young Yang - CFP KoreaBy Jaeyoung Yang, CFP

Financial planning is planning for life. It can be done without any specific license. Note, however, that the performance of financial planning is dependent upon client who wants such services. Therefore, from whom does the client want the services? What kind of certificate of qualification would they want their planner to have? And from which organizations does the client want such services?

Clients would probably like to have sincerely and reasonably proposed financial planning. Most clients understand that they have to provide their personal information to secure financial planning that is perfect for them. People are very reluctant for their personal information to be exposed, and they value the security of their personal information.

Clients Hesitate to Provide Personal Information

Naturally, clients won’t provide their personal information to a person whom they think is unreliable. To propose sufficient and appropriate financial planning for a specific client, pieces of proper information must be provided by him/her. First of all, however, it is necessary for the financial planner to gain the client’s trust. To do so, the financial planner should obtain some relevant certificates of qualification and degrees attesting to their knowledge externally and accumulate working experience, together with devoted attitude such as sincerity, faithfulness, etc., toward their clients internally.

Clients who are interested in financial techniques and whose requirement is financial counseling or entrusting for specific investment may prefer a planner with the aforesaid professional knowledge, but clients who want financial planning for life may prefer a planner with the aforesaid attitude.

To meet the requirements of sincerity, faithfulness, etc., the financial planner should have strict ethics. He/she should have a careful attitude to keep his/her client’s personal information confidential up to the last breath and should establish financial planning honestly and faithfully so that his/her clients’ profits or benefits are prioritized.

Clients Choose Trustworthy Planners First

The client who places emphasis on wealth proliferation may take for granted the reliability and ethics of a financial planning professional. Clients might prefer a planner who grows their wealth for a short period but will ultimately choose a planner with reliability and ethics and who provides planning services faithfully and sincerely in the long run, even though, the proliferation of wealth may not be realized at an earlier stage.

Meanwhile, the financial planner is paid for his/her services in the form of fee or commission.  Still, the commission may erode his/her ethics more than the fee. If the financial instruments are included in the financial planning proposal, the financial instruments whose sale benefits the planner with some commissions may be included in the proposal by the planner intentionally. It may be all right, of course, if the financial instruments included in the proposal are appropriate for the financial planning. If not, however, the planner has already gone against ethics. There may be several ways to overcome this problem, but they may largely be divided into two ways.

The first solution would be to expand the area of fees. In this case, the problem cannot be solved completely in cases where 100% of the instrument may serve as the fee, i.e., the reward of the financial planning.

The second solution would be that the planner proposes financial planning with top priority given to his/her clients’ profits. The planner needs to consider that his/her expected high income will result from long-term fees from the long-term. Even though the income from fees is small initially, financial planning requires a continuous monitoring process and new financial plans may be derived from the original one.

CFP Professionals are a Step Above

The CFP professional is a specialist with the relevant certificate of qualifications and is able to perform financial planning. They are educated to maintain their designation (qualification), maintaining a network with specialists in financial planning such as certified public accountants, attorneys at law, investment professionals, etc.

Furthermore, planners should continuously develop their ability to establish the financial planning profession. They should possess reliability and ethics in proposing a financial plan with priority given to their clients’ profits or benefits, which I believe should be recognizable by the clients. It is the CFP professional’s responsibility to obtain these ethical qualifications and any CFP professional who violates the ethics code will face disciplinary procedures.

Since financial planning is a career that deals with a client’s entire lifetime, I think it is very important that the CFP professional proves to their clients that they are reliable in an ethical manner.

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