Trust is the foundation of scalable advisory practices

Trust is a foundational asset for any modern wealth management practice, says Chris Reynolds, co-founder and executive chairman of Investment Planning Counsel.

Speaking on the latest episode of the Soundbites podcast, Reynolds said practices not only need to earn the trust of clients but must develop an internal environment of trust where wealth managers, staff, and executives share a bond of reciprocal confidence.

“If you can’t trust your staff, you can’t scale. You can’t get bigger. In fact, you can’t really do anything well,” he said.

“We’re in the wealth management business. Our whole job is to create a brand of trust.”

Sharing insights from his book The Six-Circle Strategy: The Entrepreneur’s Journey to Wealth and Freedom, Reynolds said earning the trust of clients hinges on an ability to truly understand client needs.

“I think we all recognize that trust is created through consistent behaviours, not impressive presentations, not graphs, not charts,” he said. “Your brand is simply the trust clients have in you.”

And that starts with active questioning, he said.

“It’s the discipline of asking curious, non-leading questions. What you really are trying to understand — whether it’s with a prospective client, an existing client or a team member — is that person,” he said. “What are their real goals? What are their fears? What do they value? How do they make decisions?”

People want to be heard, he explained, not sold to. Asking questions builds trust because it signals respect and humility.

“It shows your clients that you’re committed to understanding their world before recommending anything,” he said. “When you ask great questions, clients and team members feel understood, and trust naturally follows.”

Transparency

A lack of transparency is a trust-killer, he warned.

“Transparency accelerates trust, and trust is your brand,” he said. “So, the more transparency you can have, the better.”

That includes when an investment doesn’t go as planned.

“We’re hired to make people’s money grow, and if it’s not growing to their expectation, what should you do about it? The more specific you can be … the more trust will be established,” he said.

He said advisors need to explain the “why” behind every piece of advice given.

“As long as that why exists today, then we should continue down that path,” he said. “Does that why still exist in today’s marketplace? If it doesn’t, then you have changes to make. But be transparent about it.”

Core product

The benefits of trust extend beyond the advisor-client relationship. It builds a strong corporate culture, he said. Conversely, a lack of trust often leads executives to micromanage their own practices, which robs them of time that would be better spent with clients, prospects, and suppliers.

“You have to trust your people. Because if not — if every decision has to flow up, where only a few people make all the decisions — nothing ever happens. Decisions are slow,” he said.

“Trust is a core product of every great business.”

Know yourself

Reynolds said an often-overlooked aspect of trust is the one that is directed inward — the act of trusting yourself.

“By trusting yourself, you have confidence in everything,” he explained. “You have confidence in your tactical judgment, your professional instincts, your ability to guide clients.”

That starts with self-knowledge — knowing what you’re good at, what you’re not so good at, and how you should react in common business scenarios — but it extends to demonstrating consistency in all of your business dealings, regulating your emotions, and having the courage to act when faced with a dilemma.

“I go by the 70% rule. If you have 70% of the information and it’s positive, then make a decision,” he said. “When you trust yourself, your clients and your team feel safer, they trust your guidance, and they believe in your leadership.”

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This article is part of the Soundbites program, sponsored by Canada Life. The article was written without sponsor input.