"Information is the oxygen of the modern age."- Ronald Reagan
President Reagan was speaking about the pivotal role unrestricted information plays in securing freedom. But he could as easily have been talking about the importance that open information plays in your freedom to act as a trustworthy advisor. That's because clear-cut disclosure flowing from client to advisor, from advisor to client, and from both parties to the file is the oxygen that will keep your financial services business alive and well.
Think about it. If information flows freely, and is managed correctly, it is much easier to be on top of your sales game. You know what clients' needs are and how to meet them. You're much less likely to get distracted by side issues such as commissions. By that same token, clients will sense your integrity and know exactly what you're recommending and why it makes sense. Finally, down the road, others – beneficiaries, regulators – will know you acted responsibly because your clients' wishes and your recommendations were fully documented in writing.
Let's take a closer look at the three types of information flow:
