Radical transparency has become a major buzzword in recent years, spanning everything from boardrooms to personal relationships. For financial advisors, it can have some significant benefits, particularly when it comes to connecting with clients.
In a recent conversation, Marguerita Cheng, founder and CEO of Blue Ocean Global Wealth, and Carolyn McClanahan, president of Life Planning Partners, shared their take on radical transparency and explained how advisors can benefit from incorporating this type of transparency into their practices.
Transparency Can Make Financial Planning More Relatable
At its core, radical transparency is about being candid with others, but the real-world applications vary depending on how it’s used. For Cheng and McClanahan, being radically transparent advisors boils down to being genuine with their clients and acting in their best interests.
“It means communicating to your clients in a way where you are not talking over them, and you’re not talking down to them, but rather making personal finance relatable and accessible,” says Cheng. This often means sharing personal stories, asking the right questions, and looking for opportunities to find common ground.
One of the advantages of this approach is that it allows clients to open up more easily and share information about their finances and their goals. This is especially true when it comes to difficult topics like caregiving and estate planning. “If we learn how to normalize these conversations and how to talk about them comfortably, that lifts a huge weight off our clients’ shoulders,” says McClanahan.
Being Candid With Clients Can Create Long-Term Relationships
Another advantage of transparency is the potential for developing strong relationships. By helping clients understand the value of financial planning, this approach can build trust and lead to better outcomes.
A key factor in developing these types of relationships is setting expectations from the start. That includes sharing client engagement standards and letting clients know what they can expect from the relationship. “When I onboard a client, before we even take any money under management, they must do financial planning,” says Cheng. This ensures that her firm can deliver the best possible value for clients and that they’re able to make informed decisions about their financial future.
The Bottom Line
While still a relatively new concept, radical transparency is likely to continue gaining traction with advisors, especially among RIAs. For McClanahan and Cheng, this level of candor is a core part of how they engage with clients. “Being genuine, and being willing to share your stories and making things relatable is so important,” says McClanahan. “We all have issues, and by sharing those issues and being willing to open up those cans of worms, we can do a much better job helping clients.”