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Practice Management

Courting your clients: Earning trust in a skeptical world

Earning and maintaining the trust of your clients is vital, but that trust can be elusive.

Investors often recognize the need for a financial professional’s insight and guidance, and 77% of Americans who work with one say they’re more confident about their financial future, according to a study by the Million Dollar Roundtable, an association of financial professionals. But misperceptions about the industry and uncertainty about the market can keep them from fully letting their guard down.

A lack of trust can make serving your clients effectively more challenging. Nevertheless, it’s a situation that can be remedied with the right approach.

See through the client lens

An important first step for building trust is understanding why it may be lacking in the first place. Clients want to know that their financial professional is acting in their best interest. According to the Economic Policy Institute, retirement savers alone lose $17 billion annually when acting on investment advice from financial professionals who have conflicts of interest. That’s not a reassuring number for investors focused on long-term financial security. The 2008 financial crisis also continues to take a toll on investor confidence and trust, particularly among younger investors, according to industry research.

Understanding client fears can help put any trust issues into perspective. It also gives you a foundation for facilitating a discussion about client concerns and how you can work together to address them, which can help build trust.

Deliver what clients want most

Clients may have high expectations for financial professionals and recognizing their most important needs can be crucial in building trust. According to a research report from the CFA Institute, what clients desire most from financial professionals includes:

  • Transparency — Investors want full disclosure when it comes to fees and other costs, as well as potential conflicts of interest. Moreover, clients want the fees they pay to reflect the value they’re getting in return.
  • Security — In the age of data breaches, protection of personal information is paramount for investors. The CFA Institute report reveals that 84% of investors said they valued reliable security measures in their financial professional.
  • Simplicity — Clients want to make investment decisions without being inundated by jargon. For financial professionals, that means presenting investment reports, data and recommendations in language that’s easy to understand.
  • Convenience — Technology plays a growing role in the client-consultant relationship. While 52% of investors in the CFA Institute report preferred human interactions to guide their investment strategy, 48% said they’d be interested in having greater access to tech tools to help manage their investments in the future.

Engage authentically

As a financial professional, you’re helping steer investors toward their goals, but to build trust they need to feel involved in the process. Clients don’t want to be “talked at” or targeted with a sales pitch every time you communicate. Some simple ways to foster trust through engagement include:
  • Tailoring communications to client needs and desires — Millennials, for instance, may prefer e-mail, text or live chats to discuss investment needs, while older clients may prefer face-to-face interactions.
  • Strike the right balance on social media — Social media can be a powerful way to connect with current and prospective clients, but it’s important to ensure that you’re sending the right messages. Consider following the 70/20/10 rule when publishing updates: 70% lifestyle content, 20% industry content and 10% corporate content. A 2018 study by Hearsay Systems found that lifestyle content resulted in the highest level of engagement between financial professionals and clients.
  • Listen actively — If you want clients to listen to you, you must first listen to them. That requires hearing, absorbing and understanding what’s being said, without interrupting or interjecting with your own point of view. Giving your clients breathing room to speak freely, while actively listening to what they have to say, can lead to a more authentic— and trusting—collaboration.

Show your appreciation

In a client-consultant relationship, there should be healthy boundaries, but those boundaries shouldn’t prevent you from letting your clients know how much you value them. Taking time to do that regularly, through a client appreciation event, for example, can reinforce and strengthen trust in your relationship.

Getting to know your clients and taking a personal interest in their lives is another way to encourage trust. Just remember to draw appropriate boundaries. A client may be comfortable discussing their career or hobbies, for instance, but talking about their spouse or kids outside of a financial planning context may be off-limits.

Be true to your word

One of the fastest ways to lose client trust is not doing what you say you’re going to do. As a financial professional, you need to perfect the art of the follow-through. You can do that by discussing expectations with clients regularly and giving them an opportunity to ask questions or raise concerns. Avoid over-promising if you’re not 100 percent sure you can deliver.

And if you do fumble, address it with your clients promptly and professionally. Explain what went wrong and reinforce your commitment to serving their needs to the best of your ability going forward. Showing your human side, even when it’s in connection with a mishap on your part, can sometimes be the most powerful way of all to build trust.



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