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‘Engage with clients’ hearts as well as their brains’

The five-page paper, co-written by Julian Powe and Charles H Green of US-based training organisation Trusted Adviser Associates and George Kinder, founder of the US-based Kinder Institute of Life Planning, has proposed that advisers build-up their conversational skills and ensure they do not stick to “detailed processes” at the expense of fostering “strong trust” principles.

It also called for advisory firms to promote a more client-centric culture so that they can seize the chance to create a “high trust strategy in an increasingly low-trust environment”.

The paper stated: “Wealth advice organisations of course need strong processes for compliance and the reinforcement of consistently good habits.”

However, it warned that, in the authors’ experience, these can become so over-defined that they squeeze out a real connection with the client.

The paper added: “Indeed, the processes can actually fool wealth advisers into believing that, by following them, they are really connecting with their client much better than they actually are.”

According to the document, firms could also mitigate the risk that advisers could “walk” and take clients with them after developing stronger relationships if “trust-based conversations” are at the heart of the company.

Derek Bradley, former financial adviser and chief executive of Panacea Adviser, said: “Trust in financial services has been an issue for a number of years now due to past failings of regulation of course, but also a small, select number of individuals.

“For too long our advisers have suffered the mistakes of the past and we hope to redress the balance.”

Life planning values

Firms must strengthen the mind sets and values consistent with outstanding client interest and care

Advisers should be trained to follow a conversational structure and understand the process that inspires their clients to live with purpose.

Advisers’ skills must be developed so they can be confident in trust-based conversations.

Industry comment:

Gina Miller, partner at London-based wealth manager SCM Private, said: “Language is hugely important. We talk about an industry rather than a profession and rarely do we hear about people’s financial health. The actual engagement with clients should kept as simple as possible, as they do not want endless boxes to tick.”

Adviser view:

Brian Brotherton, principal of Essex-based The Partnership, said: “Since the FCA announced it was taking over CCLs from the Office of Fair Trading the regulatory rules seem to fall into a Venn diagram. It makes you wonder if the FCA really knows what a mortgage advisers’ job entails. I don’t object to the payment for a new CCL, I object to not having crystal clear guidance on what I do and do no need.”