Fiduciary meeting with client.
As a fiduciary, one of the most crucial aspects of your role is establishing and maintaining effective communication with your clients and the trust beneficiaries. Effective communication not only ensures that all parties are well-informed, but it also fosters trust and helps to build a strong client-fiduciary relationship.
Here we share a few key strategies that fiduciaries can employ to build strong lines of communication, enhancing transparency and facilitating a harmonious relationship with their clients.
To effectively communicate with your clients, it is essential to establish clear and accessible communication channels. This can include regular face-to-face meetings, phone calls, email correspondence or even the use of a secure online platform, like Zoom. By providing multiple avenues for communication, you ensure that individuals can reach you in a way that is most convenient for them.
During your onboarding process, make it a point to question which communication channel works best for your client. Some may be open to unprompted phone calls, while others prefer appointment-based communication. Document which channel is preferred and provide an overview of the cadence in which you’ll communicate.
Once you have an understanding of their preferred communication channels, it’s important to establish clear expectations on the client-fiduciary relationship. Fiduciaries should clearly articulate their role, responsibilities, and the services they provide based on the needs of the client. In some cases your role might be a daily money manager, helping pay bills and managing day to day finances. In other cases, you might also be coordinating in-home care and making health related decisions.
This is also an excellent time to outline the roles and responsibilities of outside parties that are privy to the trust, like a financial advisor or tax accountant. If your client already has built a team of professionals to support them, it’s important to leverage those relationships to help maximize your relationship. This enables the trustee to forward any questions or concerns to the appropriate party and in turn reduces your administrative burden. However, you will of course need to do your own due diligence of these existing relationships to confirm they are acting in the best needs of your client.
If your client is not yet working with an investment advisor or CPA, be sure to refer your client to a professional who is familiar with working with fiduciaries. They should have an intricate understanding of the unique aspects of trusts and conservatorships and can help the client navigate this delicate life transition.
One key way to enhance the client-fiduciary relationship is by being proactive. Proactivity is key when it comes to communication as a fiduciary. Regularly reach out to your clients to provide updates, address questions or concerns, and offer guidance. If you are able, make it a point to meet up regularly face-to-face, as potential problems can be avoided by in person observation. Proactive communication not only demonstrates your commitment but it also helps prevent potential misunderstandings and conflicts.
Consider routine check-ins, like monthly or quarterly, to keep your clients abreast of any information and share informative articles, webinars, or legislative updates pertinent to the trust. Clients may find solace in the routine and look forward to these types of meetings and a chance to see a familiar face.
Financial matters, especially related to trusts, can be complex and overwhelming. As a fiduciary, it’s essential to simplify complex concepts and convey them in a clear and understandable manner.
Avoid using jargon and technical terms without providing context or explanation. Use visual aids, examples, and analogies to help your clients grasp complex ideas and make informed decisions. Consider working with advisors who can also explain these concepts in a manner that the client can both understand and relate to.
One of the simplest ways to build trust within the client-fiduciary relationship is with responsiveness. Fiduciaries should strive to address inquiries promptly and thoroughly.
While being timely with your response is certainly the goal, be sure to enforce boundaries as needed. This plays into the aforementioned strategies, like establishing routine check-ins and setting clear expectations, so that you are not constantly on-call to your client’s needs.
Always maintain detailed records of all communication and transactions. This not only serves as a safeguard for both parties, but also provides a comprehensive history of decisions and discussions. For fiduciaries who bill hourly, accurate timesheets and descriptions with appropriate detail will give you a higher chance of getting your fees approved.
Documenting interactions helps clarify the decision-making process and minimizes the risk of misunderstandings within the client-fiduciary relationship. If starting out, consider using a client relationship management (CRM ) system to help manage and record client information.
Handling difficult conversations is an inevitable part of being a fiduciary, as financial matters can be complex and emotionally charged. Navigating these conversations with sensitivity and professionalism is crucial for maintaining and ensuring the client’s best interests are served.
Remember that some of these conversations might not solely be with the client, but with family members who have opposing viewpoints. Before having a difficult conversation, thoroughly prepare by reviewing relevant information and documentation. Understand the facts and potential outcomes and be ready to explain complex concepts in a clear and concise manner. Approach the conversation with empathy and understanding and provide your client and their family members with an opportunity to express themselves fully before responding.
It can also be helpful to be trained on mediation strategies, so you are able to navigate situations where there are strong disagreements or resentment.
Following your discussion, follow up with a summary of key points and decisions agreed upon. This written documentation helps ensure clarity and serves as a reference for both parties.
Encourage clients and beneficiaries to provide feedback on the communication process and ways to improve the client-fiduciary relationship. Constructive feedback can be invaluable in identifying areas for improvement and tailoring communication strategies to better meet the needs and expectations of your clients.
Building effective communication strategies as a fiduciary is essential for establishing trust, transparency, and successful client and beneficiary relationships. By understanding your clients needs, valuing transparency, and proactively engaging with your clients, you can enhance communication and foster stronger connections.
Remember to utilize multiple communication channels, simplify complex concepts, and prioritize timeliness to ensure your clients are well-informed and confident in the client-fiduciary relationship. Effective communication is a continuous process that requires ongoing effort and reflection.
Investment advice through Prudent Investors, an SEC-registered investment advisor. This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision. Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Prudent Investors. Prudent Investors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions.
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