Transparency, Client Trust, and Abraham Lincoln

With President’s Day top of mind, consider this: Abraham Lincoln was both a lawyer and a politician, and yet somehow, he earned the nickname “Honest Abe”.

When you think about your own relationships with investor clients and prospects, how can you provide greater transparency to create the same level of trust?

While advisers struggled to expand their practices through the pandemic, InvestmentNews’ Nicole Casperson wrote, “Tech tools that enhance transparency between an adviser and investor may be what advisers are looking for.” In addition to facilitating virtual interactions, tech-fueled communications shine a light on complex concepts, distilling data to address the all-important investor question: “What does this mean for me?”

Transparency in financial services isn’t just about establishing trust, a top factor in choosing an advisor as rated by Cerulli Associates. It’s a two-sided contract essential for the advisor to fully understand the client or prospect’s needs, bake those needs into the financial plan or proposal, and ultimately demonstrate their understanding of the client’s goals and how to best achieve them. It means being able to efficiently review with investors their portfolio allocations, provide holistic and goals-based information, and deliver deeper, more relevant insights that clients can access whenever and wherever they need it. By fostering stronger advisor-client relationships, greater engagement, and more informative decision making on both sides, advisors can deliver greater ultimate success for both the client and their practice.

The need for greater transparency goes hand in hand with the deeper digitalization of client servicing. Even after the pandemic, digital-first capabilities will continue to power more advisor-investor interactions, fanned by growing investor and advisor comfort with technologies that deliver new capabilities. What’s interesting is such digitalization both necessitate the need for greater transparency while also enabling it. As more advisor-client interactions are conducted virtually, advisors will have to find ways to cross the digital divide to establish and reaffirm trust. Since a lot of this will have to happen via technology, it will be important for advisors to choose technology based on the level of transparency it provides.

Static quarterly reports, for instance, must give way to interactive, goal-based discussions supported by dynamic reporting options that investors and advisors can access whenever the need arises. All planning and reporting tools must be designed to present in an elegant and customizable fashion during video conferences. And digital marketing must be embraced in both client communication and lead generation to showcase the advisor’s experience, expertise, and personal brand where people are most likely to see it: online.

If Abraham Lincoln were alive today and wanted to become a financial advisor, you can bet he’d be a master at combining digitalization and transparency. After all, he was as honest as he was shrewd. He was also a master communicator. It can seem like a high bar to meet for today’s advisors, but that’s what successful advisors do: reach high.

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