A recent New York Times article highlighted the growing debate around “fiduciary responsibility.” That is, financial institutions’ obligations to their customers (or the lack thereof). At the center of this debate is a conflict of interest. There are businesses that are designed to make money by giving you advice but what happens when what’s best for your financial future isn’t the same as what’s best for their financial future?
Carl Richards, the author of the article, offers three pieces of advice for finding a respectable financial advisor:
- “A quick prescription without a diagnosis describes too many investors. People need advice that fits their financial situation, not someone else’s.”
- Ask about conflicts of interest. “The professionals who don’t hesitate to pull back the curtain are more likely to put your interests first.”
- “Ask financial professionals two questions: How much do I pay you? And who else is paying you?”
Richards goes on to say that, “many of us have learned that we should never judge a book by its cover. In that same vein, we really shouldn’t care about titles, job descriptions, or even where someone works. What we should focus on is what someone actually does.”
“One way to deal with this new level of accountability is to address it head on,” says authority-positioning consultant Lisa Williams. “Before your clients start asking, ‘how much do I pay you?’ or ‘who else is paying you?,’ start building your authority as a trusted advisor and address the hard questions.”
In the eyes of experts like Williams, the general public’s heightened sensitivity is an opportunity for any financial planner ready to seize it. “Your articles, videos, and blog posts should be educating and advocating on behalf of your customers,” she explains. “You can establish a stronger reputation and credibility by being featured in the media or by writing a book addressing questions such as the ones Richards raises.”
It’s an important time to be a financial planner who is willing to put the investor’s interests first. Then any potential losses you incur (from recommending the best investment strategy for them) will be more than recuperated from the higher level of credibility you will establish. This credibility can result in media exposure that creates more trust, which means more subsequent business.
The bottom line is this: You’ve been put on alert, financial planners. Your reputations are on the line, now more than ever before.
Consider viewing quotes from President Obama differently, like the following: “You want to give financial advice, you’ve got to put your client’s interests first. You can’t have a conflict of interest.” Instead of running away with your tails between your legs, view this as an opportunity.
Lisa Williams is an authority positioning consultant for professionals who make a living charging for their advice, experience, and expertise. To find out more about how you can establish more credibility visit: http://www.mediaauthoritymarketing.com.