Ask about your prospects' values before you ask about their account values.

    We have all heard that "Trust is the hardest thing to find and the easiest to lose." It is the key to a successful relationship between a client and an advisor, yet it isn't something that you gain by merely saying, "Trust me." 
    So what is it that financial planners do that consistently inspire trust that others may not? As we all probably know, gaining trust is very complicated and often takes years to develop. Nevertheless, we believe the process can be accelerated by what you do and say early in the planning process.
    Moreover, it could be nurtured to grow as the relationship continues. Many advisors, because they see themselves as honest people, tend to take trust for granted. But establishing and maintaining trust involves more than honesty. And since it is so valuable, shouldn't we find ways to accelerate the process rather than leave it to chance?
    Clients who trust you are not likely to fire you because of a market downturn or poor investment performance. When a true trust relationship exists, it becomes a pleasure to work with the client. And, of course, clients who trust you are likely to refer you to their friends, associates and family.
    While there are many components to building trust, we believe that integrity and empathy are the most important. Integrity, of course, is at the core. Some people equate integrity with honesty, but it goes far beyond that. Honesty, for example, may mean telling the truth when asked. Integrity, on the other hand, means disclosing all important information and potential conflicts without being asked. Integrity is disclosing, for example, how much you earn from the services and products you recommend.
    If you are paid commissions, it means telling clients what the commission is. If you are a fee-only planner, it may mean disclosing, in advance, that you charge asset management fees in addition to planning fees for the services you provide. Handing them an ADV, while it satisfies the regulators, is not enough. If you bill hourly, you need to accurately estimate the total fee in advance. If you place a "cap" on your hourly billings, you should almost always bill less than the cap. Full disclosure is an important ingredient in building the trust relationship. Your clients are much more likely to trust someone who fully discloses this information than one who acts as if it's none of the client's business.
    When Roy had a new home built three years ago, his builder presented him with a fully disclosed and itemized estimate of the total cost. At the bottom of the sheet was the amount of money this builder was making on the project. This was one of many things he did that demonstrated to Roy that he could trust him-and three years later, that trust has grown.
    In 1983, Roy was in the life insurance business and decided to offer fee-based financial planning. That meant that he had to register as an investment advisor with the SEC and the New Jersey Department of Securities. In addition to the approval letter he received from the state, he was provided with the state laws for investment advisors. Among other things, they required that Roy disclose the amount of any commissions he would receive from products he recommended.
    At the time, Roy was convinced that his clients would balk at the insurance commissions, but he had no choice but to comply with the law. He was quite surprised at the reaction from his clients. Many of them actually told him how much they appreciated this openness and that no other advisor had ever done so before.
    Moreover, none of them ever objected to the commission Roy was earning. Roy learned a valuable lesson at the time. Being open about everything we do is not risky. It actually helps to build trust. It's that way in personal relationships, and it's that way in client-planner relationships.
    Integrity also means establishing realistic expectations for your clients. Nothing will erode trust faster than a client discovering that you made unrealistic claims because you wanted the business. For example, what do you communicate that you can do for your clients' portfolios? Roy tells his prospective clients that if their goal is to "beat the market," then they have visited the wrong planner. He tells them t they may encounter three types of planners. One will know that he is not capable of consistently beating the market, but will claim that he can. The second will actually believe he can beat the market, but cannot. The third will know that he is not able to do better than the overall market, and will tell you so. Roy tells them that they are in the office of the third type of advisor. Client expectations about market performance need to be communicated up front to avoid disappointments and an accompanying loss of trust as a result.
    You begin to demonstrate your empathy with the discovery process you use. This sends a message to your clients about your interest and intentions in their affairs. It is one of the linchpins in attaining and maintaining trust. The questions you ask will differentiate you from the pack if those questions are life-focused rather than financial-focused. By asking the right questions, you create a foundational framework in their mind. In previous articles, we have written about the important of the initial questions you ask and how they affect your clients' perception of you.
    Asking about their lives before you ask about their money communicates to them that you care about who they are and their unique needs. You are more likely to begin building trust by asking about their lives than you are by collecting asset information. The American Society of Association Executives wrote,  "One-to-one relationship building will become even more important in a world where everyone is suffering from information overload. You are far more likely to get my attention if you demonstrate you know who I am and what my aspirations are."
    Elissa Buie, CFP, asks all of her new clients to recount their life histories. "Several years ago," she says, "I hired a business consultant who wanted me to identify my target market. He asked me to examine my clients to find a common thread among my best clients. I started by listing the people I liked working with and cross-referenced them to the ones that were most profitable. I wasn't surprised to discover that many of my clients appeared on both lists. I wanted to understand the similarities and found none, except for one thing: They were the clients I knew the best-the ones with whom I had the most intimate relationships. I told my consultant this and he said, 'Elissa, we can't build a marketing plan that targets people you know well!' That was obvious, but I wanted to find a way to jump-start what normally took five years to develop. I knew that after working with clients for several years, they would share their stories and life dreams with me. I felt that knowing a person's life history would be a good place to start. We ask all of our new clients 'Tell us about yourself, we'd like to know your life history.' An open-ended question like this enables them to go where they want to go with the answer. What they talk about is our first clue to what really matters in their lives. What I did not realize at the time was that there is such a huge intimacy in being asked and actually being listened to."  Elissa clearly demonstrates her empathy and she is rewarded by the trust her clients place in her.
    Clients want to work with advisors who understand their life and goals. When an advisor makes sufficient inquiry into the lives of her clients, they begin to feel that the groundwork is in place for trusting that advisor because the advisor is now connected to their lives and goals--as well as their account balances. If an advisor knows little to nothing about what is happening or will be happening in the life of the client, then the trust level of the client may be hinged exclusively on the performance of the advisor. In this paradigm, as soon as performance dips, the trust level dips with it. If, however, the trust level is built on knowledge and understanding of the client, the fluctuation and temperament of trust is changed.
    Performance, while important, will not be the sole basis for continuing the relationship. To change advisors because of market fluctuations, the client would be faced with the prospect of working with someone who does not understand his life as well as his current financial advisor does. Trust is at the core of why a client will maintain a relationship with an advisor. An intelligent and comprehensive inquiry process is necessary for initiating this level of trust.
    Good questions are the key to a better advisory business. Good questions reveal as much about you as the answers reveal about your client. Think of the people you personally trust the most, and recollect the level of discovery they have done in your life. Chances are they have intimate knowledge of your life because they cared enough to ask the right questions and had the time to listen to and respond to your answers. In the psyche of clients, your level of inquiry indicates your level of caring.
    Why would clients want to trust an individual who only inquired about their account balances? Such inquiry is a poor foundation for establishing trust at any level--especially at the level required to maintain long-term relationships and endure turbulent markets. Your future hinges as much on your process of discovery-and the care and curiosity that drive that process-as it does on your ability to manage and invest the assets entrusted to you. Begin today to increase the depth and breadth of your inquiry process and witness the transformation it can bring to your client relations--and ultimately to your business success.

Roy Diliberto is chairman and founder of RTD Financial Advisors Inc. in Philadelphia. Mitch Anthony is the author of Your Clients For Life, The New Retirementality and Your Client's Story and is a regular keynote speaker at industry events.