Why advisers need to earn their clients’ trust

Beaufort Financial executive chairman Simon Goldthorpe explores why it is so important for financial advisers to earn and maintain their clients’ trust. 

SimonGoldthorpe It’s all about trust. As financial advisers, our aim and duty is to inspire confidence in our clients. This must seem obvious, but it is something that we need to work at every day. We can’t afford complacency. Our services are more in demand than ever as the need for financial advice has become more acute than ever. Yet we know that people find it difficult to find financial advice.

Consider the ongoing fall out of the credit crunch, the seemingly endless era of ultra low interest rates, constantly tightening regulation and ever changing tax rules and legislation, let alone the state of the bond and equity markets, geo-political volatility and so on. Not only do our clients need to trust us to navigate our way through these treacherous seas, but as importantly, so do the professional introducers we work with – the accountants and solicitors that introduce their trusting clients to us.

It is a blur to tens of thousands out there who desperately need financial advice. They must believe the advice and trust the adviser to do the very best for them. More importantly, they need to know where to find this advice. Do they Google it? Facebook? Or ask a friend, parent, neighbour or colleague? Or read about in the papers? They don’t like talking about it and don’t know where to turn. And the banks won’t help.

Two recent and alarming examples of a breakdown of trust and secondly a lack of trust have damaged our industry’s reputation.

We read daily about Woodford as new allegations emerge about the conduct of the managers, custodians, platforms, regulators and financial advisers who knew what and when and who did or didn’t do anything to prevent the misery suffered by ordinary investors, tens of thousands of them. They face the prospect of ruin, whilst the money men are quids in. Try rebuilding trust now.

FCA: Firms involved with Woodford ‘not following spirit of rules’

We are all urged to be vigilant about financial scams and frauds and yet we hear that the most unlikely people fall victim to convincing conmen. Small bands of crooks target not only vulnerable pensioners for their freed-up nest eggs, but also the more savvy over 55s who have now been given responsibility for making investment decisions about their financial plans in retirement. Take the 11,500 people owed £237m following the collapse of London Capital & Finance, a pukka sounding name. Internet-enabled ruthless fraudsters fleeced investors who were conned into believing LCF was kosher and regulated. Tens of millions was spent on Facebook and Google reeling investors who with hindsight should and probably would have sought financial advice. How could anyone have trusted LCF?

FSCS deems LC&F liable for advice given by marketing firm

As advisers, we must continue to be evangelical about our duty to our clients and the professionals who trust us with their clients. And to spread the word that we are professional advisers, not salespeople; that we don’t rip people off  (which is what seasoned commentators are now saying and writing about Woodford and Hargreaves Lansdown – which our clients will have heard and read!). Financial planning is almost a calling and it is about the value that we add.

Simon Goldthorpe  is executive chairman at Beaufort Financial

Follow him on Twitter @simongoldthorpe


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There is one comment at the moment, we would love to hear your opinion too.

  1. Whilst there are many valid and good points Simon, you miss a key point.

    Clients and there voting habits are what is responsible for the “treacherous waters” they need to navigate.

    Because they have accepted what the politicians and media have told them, that someone other than them is responsible for their actions.

    Until people wake up and realise that they have been sold a nightmare, not a dream this will continue to get worse and worse.

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