What is your biggest asset as a financial advisor? It isn’t your education, degree, or name recognition. It’s the trust you build with clients.
Trust is the foundation of a strong advisor-client relationship and what creates opportunities to grow your firm. When asked why clients initially selected their financial advisor, the overwhelming response was because it was someone they trusted. Establishing trust is crucial in attracting new clients, but it also goes a long way in continuing relationships and growing your firm.
Clients who trust their advisors tend to stick around and are loyal to the firm. A study by Vanguard found that 94% of investors were likely to make a referral when they “highly trusted” their advisor. Trust isn’t built overnight but comes through strong habits and relationships in four key areas.
Trust Your Expertise
The most basic form of trust is functional: Can clients trust that you are a skilled advisor who will benefit their financial futures? Do you prove your value as an advisor? Clients are trusting you with their financial futures and need to feel confident that you have the expertise to protect their money and help them reach their financial goals. They need to trust that you know what you’re talking about and are knowledgeable in financial products that relate to their life.
When clients trust your expertise, they will listen to your advice and understand that you are acting in their best interests. Build trust in your expertise by sharing your education, training, and certifications.
Trust Your Values
Establishing your trust as a knowledgeable advisor is important. But when potential and new clients connect with you, they likely already feel confident in your intellectual abilities and experience. What they need is to build emotional trust in your values and attitudes. Clients need to trust that you will abide by a moral and ethical code.
The core of emotional trust comes down to clients’ trust that their advisor acts with their best interests in mind. If an advisor has strong values and a moral compass, clients can trust that they will always lead them in the right direction. But if clients don’t know if an advisor is helping them or only looking out for themselves, they are less likely to trust the advisor.
Clients want to know your philosophy toward investing and what motivates you. To build emotional trust, clearly state your values and the reason behind your actions. Steering clear of regulatory issues and investigations also shows you understand the industry and follow regulations.
Strong morals matter. When clients trust their advisors emotionally, they are more than twice as likely to offer a referral, compared to those who said they only had a moderate amount of trust in their advisors.
Trust Your Service
Every advisor can offer financial products; what sets you apart is the personal care you provide to clients. They must trust that you genuinely care for them and will deliver personalized service. One survey found that 25% of financial clients said they would leave their advisor because of a lack of “personal connection.” Clients who trust you know them and give them personalized service, not just cookie-cutter recommendations, feel more comfortable.
Establishing a trusting relationship starts by listening to new clients and fully understanding their life stage, worries, financial goals, and plans.
Trust Your Commitment
When clients sign on with an advisor, they’re looking for a long-term commitment and a relationship that will last for years or even generations. Build trust in your commitment to your clients by doing what you say you’ll do and being available to answer their questions.
Broken promises and empty action plans can quickly destroy trust. If a client can’t trust that you will call when you promised or send a form like you said, it’s difficult for them to trust that you’ll continually act with their best financial needs in mind. Small things matter, so don’t let a missed call or email erode your client’s trust.
Finances are stressful, especially during turbulent economic or personal times. Clients want an advisor they can trust to stick around and help them weather the storm instead of bailing at the first sign of stress or struggle. Although nearly three-quarters of U.S. investors are worried about inflation, 83% say their financial advisor has informed them how market volatility will affect their long-term financial goals. Establishing trust during good times and bad shows your commitment to clients and keeps them engaged.
Trust means everything to financial advisors. You can’t build strong relationships and a solid firm without first establishing that foundation of trust.
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