The financial services industry is suffering from a reputation crisis. There have been so many stories of advisors who gave bad advice or who did not act in the client’s best interest that investors are wary. So even though the negative press has nothing to do with you and how you treat your clients, those who come to you are skeptical. The only way to overcome that skepticism is through trust.
Here are some ideas from Mike Maslansky, of the noted research firm maslansky + partners, on how to build trust through the way you communicate:
- Understand the client’s perspective
As advisors, you have a set of beliefs about the markets based on facts from credible sources. But your clients’ perspective is usually not the same as yours. You may have a client who finds some investment on the internet and decides it is just as credible as something backed up by significant research. If you want to build trust, you must understand their perspective, their experiences, their truth.Most advisors believe that the market is cyclical, that it’s come back from the Great Recession. And even if you think some things are different now, chances are you believe most investing fundamentals have stayed the same. Many investors say they think that some investing principles have stayed the same but most things are different.Advisors need to talk about more than a client’s goals and needs; they also should discuss the client’s experiences with the market and with other advisors. If investors typically believe that advisors only recommend a product if they’re getting a special incentive for it, then no matter what you’re doing and how you’re presenting your solutions, investors are going to assume that you’re just another sales-focused advisor—and not client focused.
- It’s not about you, it’s about them (the Personal Principle)
Although this may seem obvious, when many financial advisors have conversations with clients the conversation ends up being much more about the advisor than it is about the client. The more time you spend talking about the client and the less you talk about the product, the better off you are, the more you build trust. Use the word “you” to make things feel more personal and make your communications more effective.
- Replace jargon with words everyone understands (the Plainspoken Principle)
There is so much jargon that advisors don’t even recognize it as jargon. People don’t know what you think they know. That doesn’t mean you can be condescending to them, but it does mean to think about all the terms that you’re using and whether or not people actually understand them. Use language that everyone can understand.
- Word things positively, not negatively (the Positive Principle)
We ask what’s most attractive to investors: an investment that (1) “helps them avoid the risks and threats to retire any way that they want,” or one that (2) “helps them take advantage of opportunities?” Investors always go for the 2nd response which is more positive. If you’re trying to motivate people to act, make sure you do it with a positive solution, not a problem.
- There’s no such thing as a “perfect” solution (the Plausible Principle)
Nothing in life is perfect. Everything has pros and cons and every benefit has a cost. When we try and present things as perfect solutions they lack credibility. When we temper our promises, we become more credible and actually more attractive. This particularly applies to retirement. When you say, “I’m going to help you achieve your dreams,” people are skeptical. But when you say, “I’m going to make sure you have a comfortable retirement that lets you live the lifestyle that you’ve become used to, that you want,” — that becomes a much more compelling value proposition.
More effective client communications make for a better client experience.
You can find more details on communications principles and best practices in Mike Maslansky’s book The Language of Trust, Selling Ideas in a World of Skeptics.