Trust is Key to Financial Advisor-Client Relationships

March 28, 2014

March Blog 3 - Trust Image-m90hrWhen a client chooses any provider, whether a family doctor or nanny, trust plays a key role in founding the rapport.  The same trust is even more important in choosing a provider when financial matters are involved.

In a Wharton School of the University of Pennsylvania study, it was revealed that clients consider trustworthiness as the most important characteristic of a financial advisor. According to the same study, there are three levels of trust that clients consider before choosing their financial advisor.

At first, clients seek out financial advisors whose technical competence inspires trust. “Do I trust that you know what you are doing?” – This is the first question clients propose to themselves, says Rachel Croston, a professor of information management at Wharton.

Secondly, clients look at the character of the financial advisor to assess what ethical standards they may possess. Without professional ethical conduct, technical skills alone cannot create value. “Do I trust you not to steal money from me?” – is the second question clients have about their financial advisors, says Croston.

Lastly, the third trust that clients are seeking is the trust in empathetic skills and the emotional maturity of the advisor. Usually, the interpersonal relationship dynamics between the advisor and the client exclusively rely on this trust. The client-advisor relationship competence will be extremely fragile if this level of trust is not present. It is based upon the deliberation that “If I confide in you as my advisor about private and important matters, I need to trust you will handle it appropriately.”

According to Wealth Counseling Specialist, Dr. James Grubman, wealth brings unanticipated stresses and coping with financial issues is often extremely difficult. Many financial advisors, having the technical expertise and ethical standards, often struggle because of lack of skills in solving interpersonal issues associated with wealth management.

At HFG Wealth Management, we understand that anyone with dedication can acquire the technical know-how to manage funds. And, there are plenty of honest people left in the industry that you can trust to be ethical. However, the true role of a financial advisor is not only to manage money, but to function as a confidant, to whom the client can seek advice, personal counseling and instructions.

Richard Marton, a Finance Professor at Wharton, said that “the advisor has to understand the logic behind the advice and work the argument through with the client, so the client really understands it.” HFG Wealth Management takes pride in providing a service to our clientele where the true value is found in the interpersonal understanding between our advisors and our client.

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Examples are hypothetical in nature and are for illustrative purposes only. HFG Wealth Management, LLC (“HFG”) is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views expressed by the author are the author’s alone and do not necessarily represent the views of HFG or its affiliates. The information contained in any third-party resource cited herein, including but not limited to other blogs, websites or articles, is not owned or controlled by HFG, and HFG does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by HFG of third party or any of its content or use of its content. The standard information provided in this article is for general educational purposes only and should not be construed as, or used as a substitute for, financial, investment, or other professional advice. If you have questions regarding your financial situation you should consult your financial planner, investment advisor, attorney or other professional. A copy of HFG’s current ADV Part 2A discussing HFG’s investment advisory and financial planning services and fees is available for review upon request or at



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