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Point, Counterpoint: What is the Best Way to Build Consumer Trust?

By Phil Billingham, CFP and Mark DiGiovanni, CFP

Phil Billingham, CFP from the UK says disassociation from product providers:

Disclosure is a failed way of making “Buyer Beware / Caveat Emptor” work, which will always fail. Asymmetry of knowledge is too great. To be trusted, we must be trustworthy, and trust. 

That means caring for our clients, and distancing ourselves from those who destroy wealth, mainly product providers, especially of exotic or toxic products. Distancing means no payments of commission and taking up positions against commissions in public, so financial planners are seen as different.

At the moment, the public cannot tell the difference between us, product providers and a bar of soap! We all pretend to do the same thing – make the wealth grow faster. Perhaps if we stop being about the money – like product providers – and actually go back to being all about the client – being planners – we can deserve trust?

Mark DiGiovanni, CFP from the US says educating the public:

Disclosure is not, in and of itself, a failure.  The reasons for a lack of trust are less about the disclosure process and more about all of the potential conflicts and abuses that have to be disclosed in the first place.  Disclosure provides clients with a list of reasons why they can’t fully trust the person with whom they’re working.  The best way to improve client trust is to whittle down that list of things that have to be disclosed because they’re potentially damaging to the client. Limiting or eliminating disclosure guarantees greater abuses and greater client distrust.

Even though I don’t sell anything on commission, I also don’t believe that every commissioned sale harms a client, or that those who work on commission have only their personal interests at heart.  Many a family has been spared financial disaster because life insurance was in place when a bread-winner died suddenly, and the only reason the insurance was in place was because a salesman working on commission pushed for the sale. The sale of a good product, even on a commission basis, can have the effect of helping the client, even if that was not the primary intent of the person who sold it.

In the eye of the client, perception is reality. Some clients are naïve about an advisor’s motives, and they wrongly assume that an advisor is always looking after the clients’ interests first.  Every advisor tries to create that perception, especially those who know it isn’t true.  Other clients can become so jaded that they assume every dealing with their advisor is a win-lose proposition. They believe that an advisor’s gain must come from their loss, and they can become defensive to the point of paranoia.

Here’s a fundamental question that few clients think to ask, and those who do often get a vague answer. The question: who is really pulling my advisor’s strings?


I agree that disclosure can help. But when we look at the figures (from the FSA in the UK) about why consumers do not trust advisers, only 18% stated it was from any form of personal experience. So over 80% of distrust comes from rumour, and ‘what everyone knows’.

As planners, we have to find a way of disassociating ourselves from the ‘everyone knows’. Because I would be as bold as saying that most consumer distrust has arisen because of unfair and even unethical practices amongst banks and product providers, and we get tarred with the same brush.

The very existence of commission categorises us (financial planners) as salespeople, ‘distributing’ other companies’ products. We can point to examples of ethical commission ‘sales’, of course we can, but that doesn’t matter – only the widow cares. The rest of the population is wary and distrustful.

We educate our clients to measure us by product. Our websites talk about product, we discuss tax wrappers and get paid on performance. We look like the client is the money, not the person. That breeds distrust.

What this will mean is that brands from outside will step in. They will ‘distribute’ product in a fun and simple way – Amazon Financial Services anyone? Will it then be too late to regain trust in planners?


The reasons Americans are distrustful of financial advisors probably parallel the findings in the UK.  If the main reason the public has a trust problem is “rumours and what ‘everyone knows’’’, our response should not be disassociation, but education.

On my website, is my mission statement: to Enlighten; to Enable; to Enrich. My first duty is to enlighten, which is what we must all do when there are misperceptions about our profession.  Disassociation alone does not correct the misperceptions.

Those of us who are ethical in our business practices and who put the clients’ interests first know the value and importance of our work. It is in the self-interest of qualified, ethical financial planners everywhere to educate the public about the difference between us and those who would be selling used cars if they hadn’t passed a licensing exam to sell securities or insurance.

I would like to see an aggressive marketing campaign undertaken by the CFP Board of Standards that educates the public about the difference between the professionals and the poseurs in this business. A commercial might show a high-pressure salesman suckering a sweet, old couple with some no-risk investment that pays a 5% monthly dividend, and then contrast that with a serious professional who takes the time to explain why there is no such thing as a no-risk investment that pays that kind of return. The tagline might be something like, “The only real Financial Planner is a CERTIFIED FINANCIAL PLANNER® professional. In conjunction with making the CFP designation the standard to practice in this profession, we must also protect that brand by stripping it from those who sully it. When the public sees that we in the profession place a high value on our most important designation, they will then place a high value on it, too.


 Make sure to comment below to let us know what you think the best way to build consumer trust is! 

3 comments to Point, Counterpoint: What is the Best Way to Build Consumer Trust?

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