Greg Harris, Senior Investment Manager in Maitland's London
office, ponders on the difference between 'adviser' and
that somewhat clichéd term 'trusted adviser', to
unpack what it really means to trust someone.
Following a recent panel discussion on family office affairs, I
was asked to write a short article on the importance for someone
with newfound wealth to find a trusted adviser. As I wrote, I
thought to myself that there is nothing fantastically special about
being an adviser, so what is it that elevates someone to
"trusted adviser" status?
In a world of online scams and email phishing, trust can be a
scarce commodity and most clients would balk nowadays at someone
using the remarkably unassuring words "trust me". The
frustrating thing about trust is that it is earned over time, and
there is no fast track to get there.
Trust is not dissimilar to your reputation and as Warren Buffett
"It takes 20 years to build a reputation and five minutes
to ruin it. If you think about that,you'll do things
I came across an excellent article (read here) written by Christine Crandell for
Forbes about trust – she had the following to say:
"Trust means doing what you said you're going to do
when you said it'll be done and to the best of your
This goes to the heart of what created the mistrust in the
banking and financial services sector – banks relied on their
conservative image and were understood by the public to be
conservative corporations that would safely guard the funds that
were entrusted to them. It turns out that for the most part (there
were plenty of exceptions) this was not the case.
When it came time to own up to their after-school activities, it
emerged that these banks had not done what the public had expected
of them and irrespective of whether it was correct or not,the
misalignment of expectations created a complete breakdown of the
trust built up over decades. The most recent Edelman Trust
Barometer (read here) ranked trust in financial services
and bank organisations as the lowest categories other than the
media – a continuing sorry state of affairs for the
One of the more interesting and relevant aspects of the Edelman
Trust Barometer is that the three highest ranked sectors across the
business world, from a trust perspective, were technology, consumer
electronics and the automotive industry. Given the revelations over
the past month or two with respect to Volkswagen, we would expect
to see the automotive industry suffer a sharp decline in the 2016
So what elevates an ordinary adviser into trusted adviser
Someone who demonstrates competence. There is no substitute for
an adequate knowledge base. For a private client or family this
needs to span fiduciary, taxation, estate planning and
Someone with whom you are able to maintain a relationship and
who also possesses technical skills. The Edelman survey found that
the informed public were more likely to trust either an
"expert" or "person like themselves" rather
than the CEO of a company.
Someone who is clear in their communications, rationale for
decisions and expectation management. An ambiguous adviser or one
who sits on the fence is unlikely to achieve "trusted"
Most importantly, someone who does what is right for clients,
rather than what is easy or in the adviser's interest.
For a family with newfound wealth there is no replacement for a
trusted adviser. Attempts to "do-it-yourself" often
represent a significant burden on the individual family member
nominated into the role, and provide a foundation for intra-family
tension and disagreement.
The challenge is to find a trusted adviser with whom the family
are comfortable. This is no easy task and quite often the
relationship aspect is the one which is the greatest hurdle to
overcome. Families are full of personalities – it
shouldn't be unusual that this is a key requirement!
Our advice? Spend time making your selection. It takes
significant effort and planning to sustain wealth throughout
generations and the trusted adviser is critical to this process. A
poor decision can lead to unhappy consequences.
Originally published on 25, January, 2016
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The implementation of the mandatory exchange of initial and variation margin for non-cleared OTC derivative trades in the EU commenced on 4 February for financial counterparties with the largest derivatives portfolios.
The latest report from our Centre for Regulatory Strategy, EMEA outlines the new requirements around the exchange and holding of collateral, and sets out the best practices and advanced techniques to respond effectively to the resulting collateral management challenge.
The Financial Conduct Authority FCA has published the interim feedback to the call for input to the post-implementation review of the FCA's crowdfunding rules (FS16/13) (the Interim Feedback Report)...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).