The financial services industry has taken a few hard knocks over the years, possibly starting with the mis-selling of endowment policies, this has caused many people to be cautious when it comes to taking out a mortgage or some form of income protection insurance. Many first time buyers who took out endowments did not fully understand the implications of an interest only mortgage supported by an endowment. For many the realisation came all too late that the amount they had borrowed had not actually reduced so they still owed the lender the same amount as in day one. A large number of people ended up receiving compensation after making complaints about their endowment being mis-sold to them.

Endowments were still paying out the full sum in the event of one of the policyholders passing away so what exactly was the cause of the problems with them. Well the real problem was caused by using growth rates on the endowment quotation with a range of 8% to 12% widely used for the investment calculation. It eventually turned out that a lot of borrowers were left up the creek without a paddle as it was unrealistic to expect to meet this average over longer periods of time. Another problem that seems to have cropped up with the public is with many of the older generation being advised to put their money into stocks and shares. Some of these people had a low risk profile and would not have invested in this way had the old adage of shares can go down as well as up had been properly explained. Of course many of these investors have done well when they have been prepared to leave their money locked in for the medium to long term but for those requiring immediate access it proved a failure as many panicked when their investment lost money in the early stages and cashed in their shares.

The mis-selling of endowments is obviously not the only thing that has caused distrust towards the financial sector, extreme overdraft charges, the scandal surrounding Payment Protection Insurance and the FSA having to penalise many firms has also lead to the public feeling wary. So how do you develop client trust? Well surely the first step is to know your client and fully understand their needs and aspirations. By completing a Fact Find this gives you an understanding of their current situation so you can come up with the right solutions for both the present and the future. You can go a long way to giving evidence of your interest in your clients needs by doing research and showing them the proof that you have got them the best possible option. If you concentrate on building up this relationship over time you will truly develop a bond between you and the client that will last and they will feel much more secure about you dealing with their mortgage, endowment or income protection insurance.