Trust and Transparency - J.E. Wilson Advisors

Trust and Transparency

What is the most important factor for wealthy individuals when looking for a financial advisor? Well, according to some recent research by Spectrem’s Millionaire Corner, the answer depends largely on age. Honesty and transparency are by far the most important attributes for individuals over 65, according to the study. For those one notch younger (55-64), these are still important, but this group also looks for a strong referral. For the middle, baby boomers (45-54), investment track record is highly ranked. (I suspect this group may focus on returns because they think that will help narrow the savings gap.)

Honesty and Transparency

When you think about it, those nearing retirement or already retired generally have a somewhat conservative mindset since they need to protect what they have accumulated. Thus, the emphasis of honesty and transparency makes perfect sense. Many in this age group have had poor experiences with traditional brokerage firms, banks and insurance companies who have not been as honest and transparent as expected. This is often why they arrive at our firm.

Transparency can sometimes be enhanced by technology. One of the reasons we use Blueleaf for our portfolio reporting is the highly transparent nature of this tool. Clients receive a simple, easily understandable report every week in their inbox. They know where their money is; the allocations and current values. We also have the ability to aggregate other investment / retirement accounts with Blueleaf that make this connection even more valuable.

Personal vs. Financial

I recall many years ago seeing the actor Tom Cruise on one of the morning talk shows. The conversation turned to how he managed his wealth. He told the interviewer that he could make 2 phone calls (pre-internet era) and have a complete report. Contrast that with most of those in his circumstance that have their assets spread all over, in different places.

Personal financial planning should emphasize the personal over the financial. Transparency allows this to work and helps us understand each client’s uniqueness before making recommendations and applying specific strategies. Trust follows transparency. When we deal with people that are less than transparent, we lose trust (and rightly so.)

Ready to move towards greater transparency and greater trust? Ready for a real conversation? 

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