Specific Elements of Communication That Affect Trust and Commitment in the Financial Planning Process
Sharpe, Deanna L., Anderson, Carol, White, Andrea, Galvan, Susan, Siesta, Martin, Journal of Financial Counseling and Planning
This study used survey data from 554 planners and 128 clients of those planners to examine the relationship between specific communication tasks, communication skills, communication topics, and client trust in and commitment to their financial planner and to the financial planning process. Communication skills significantly correlated with client trust and commitment were identified, providing an empirical basis for best practices in the financial planning process. Results provide empirical support for CFP® Practice Standards relative to planner-client communication tasks and for planners taking a life planning approach to the content of planner-client discussions.
Key Words: commitment, communication, financial planning, life planning, trust
Effective communication is vital to successful financial planning (Goetz & Bagwell, 2006; Lee, Pulvino, & Forman, 1984). Within the profession, the Certified Financial Planner Board of Standards' [CFP Board] (2006) Topic List for CFP® Certification Examination and Financial Planning Practice Standards (CFP Board, 2003) affirm the importance of communication in the financial planning process. Recent research has underscored the fundamental role of communication as an antecedent to client trust and commitment (Christiansen & DeVaney, 1998; Kirchmajer & Patterson, 2003; Sharma & Patterson, 1999). Among practitioners, a growing interest in life planning (a holistic, values-based, client-centered approach to financial planning) focuses attention on communication as a critical tool for building enduring and productive planner-client relationships. To date, however, little work has been done to identify which specific elements of communication are correlated with client trust and commitment.
The purpose of this study was to use survey data from a sample of financial planners and their clients to provide an empirical basis for identifying best practices in plannerclient communication. Specifically, this research endeavored to answer these questions:
1. Is the practice of certain communication tasks and skills and the discussion of specific topics significantly and positively correlated with client trust in and commitment to their financial planner?
2. Do planners and clients have similar or dissimilar views of the specific elements of communication that affect trust and commitment?
3. Are conversations centered on life planning topics significantly and positively correlated with client trust in and commitment to their financial planner?
Publications in financial planning and related fields suggest that planner-client communication can be subdivided into communication tasks, communication skills, and communication topics. Literature related to each of these aspects of communication is discussed first. Then, recent research using service marketing models to evaluate the impact of communication on client trust and commitment is reviewed.
The communication tasks of a financial planner are mainly outlined in the professional guidelines established by the CFP Board. The Topic List for CFP® Certification Examination (CFP Board, 2006) delineates the tasks that a financial planner should accomplish when initiating a professional relationship with a client. These tasks are (a) establish the client-planner relationship, (b) determine client goals and expectations, and (c) obtain information about a client's basic attitudes and characteristics. The Practice Standards further specify that during initial meetings the financial planner and the client should mutually define and agree upon the scope of work to be completed (CFP Board, 2003).
Planners decide the specific scope and content of these initial client conversations. Some prefer to focus on client financial and demographic data (Pullen, 2001). Others believe that stating their own values, priorities, and expectations helps a client decide if the relationship will be a good fit (Pulvino, Lee, & Pulvino, 2002). …