A 2018 Pew Research Center survey found that 43 percent of Americans age 65 years or older agreed with the statement, “Most people can’t be trusted.”
When the same statement was presented to Americans aged 18-29, approximately 60 percent agreed. The survey also found that 71 percent of Americans think people are less confident in each other now than they were 20 years ago.
While this skepticism can be attributed to many sources―the 24-hour news cycle, political divisiveness, social media and generational differences, to name a few―most would agree that we are unlikely to see changes for the better in the foreseeable future. Therefore, the ability to build and maintain high levels of trust in client relationships will be an even more important skill for financial planners over the next decade and beyond.
We believe that clients’ perception of trustworthiness is dependent on three specific factors: credibility, reliability and motivation. Let’s look at each one and identify specific actions you can take.
The first factor is credibility. It answers the question: “Does this person know what he or she is talking about?” Clients want to know that you have sufficient knowledge and expertise to competently deliver financial information and advice. They are likely to look to your educational background, degrees and certifications as evidence of that knowledge and expertise.
Credibility also relates to one’s experience and perspective―your ability to apply that knowledge and expertise. Experience is what makes the difference between book-smarts and wisdom, which is why CFP Board requires that candidates complete specific experience requirements before granting their certification. Experience and perspective are often communicated in your confidence and conviction.
Here are two specific actions you can take to improve your credibility:
- Create and implement an ongoing education plan. Your plan can include coursework, certification programs, books and journals, interviews and online research.
- Develop stories and case studies that demonstrate your expertise in solving complicated client planning concerns.
Reliability is the second factor that influences trustworthiness. It can be defined as the repeated fulfillment of expectations, either directly experienced or inferred from the experience of others.
Obviously, the more you do something, the more others will trust you to do it again.
However, it’s not just repetition, but the matching of expectations to fulfillment that characterizes reliability. Trustworthy advisers and planners are careful to confirm, establish, manage and fulfill their clients’ expectations time after time, even in situations where clients may have uncertain or unstated expectations.
Here are two specific actions you can take to enhance your reliability.
- During every client interaction, take the time to clarify next steps by reviewing who will do what and by when.
- Develop the habit of diligently recording every commitment on your to-do list or app, following up, and ultimately communicating back to your clients upon completion.
The third factor is motivation. The expression, “People don’t care how much you know until they know how much you care,” speaks to one’s motivation. Stated simply, motivation answers the question: “Why?”
Clients want a financial adviser or planner who is genuinely committed to putting their clients’ interests above their own, because it’s the right thing to do, not because they are required to do so.
Here are two ways to show clients and prospective clients that their success is your first priority:
- Ask thoughtful questions. Open-ended questions that begin with “how” or “what” or “tell me…” encourage expansive answers and demonstrate curiosity and concern.
- Listen intently. According to University of Minnesota researcher Dr. Ralph Nichols, “The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.” Active listening includes establishing eye contact, providing non-verbal feedback, clarifying answers and restating responses to demonstrate your understanding.
The Path to Connection
Finally, keep in mind that as you are willing to share your own experiences, hopes, failures and dreams, you provide a path to connection. Establishing trust requires a willingness to be open and honest. Someone has to make the first move, and that someone is you.
While trust levels in general may continue to fall over the next ten years, by diligently working to enhance your credibility, improve your reliability and clarify your motivation, you can build strong, trust-based relationships with your clients.
Adam Kornegay is a co-founder of Pathfinder Strategic Solutions. He has a background in marketing and business analytics. Coupled with his experience as a financial adviser, he helps a broad array of clients, from relatively new advisers to experienced planners, and consults with various financial services firms. He is a coach in the Messaging and Marketing Strategies FPA Coaches Corner.
Editor’s note: This piece originally appeared in the FPA Coaches Corner whitepaper, “Action 2020: Create Business Success for Today and Tomorrow.” Download your copy of the whitepaper here.