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Do you invest in your ‘trust’ fund?

Morningstar taps into adviser and consumer trends across different markets. One thing is clear: the importance of trust

Below, I would like to share some findings about trust from a recent survey we ran across 1000 registered users of our investor facing website, and some insights on how to build trust from an article published through Morningstar Magazine earlier this month.

What does our survey tell us?

People ranked trust as by far the most important consideration when choosing a financial adviser yet, as a whole, the advice industry is viewed as barely more trustworthy than insurance providers or investment bankers. Over half of the 1,000 participants said trust was their primary consideration, followed by the adviser’s reputation, then cost. Past investment returns came in fourth, while considerations such as the adviser’s tech savviness or locality were of little importance to most consumers. The crisis element of the story comes in when asking the same individuals how they view various financial services industries. The financial news and information industry is the only one to enjoy a good or very good level of trust from at least half the consumers questioned.

So how can you address the trust issue? 

Carl Richards, CFP and author of The Behaviour Gap: Simple Ways to Stop Doing Dumb Things with Money, talks about small actions that you can take to encourage trust and help you build long-term client relationships.

Trust is built through small actions repeated over and over.  One way you can measure that trust is whether your clients refer their friends and family to you.  Dan Sullivan, president of The Strategic Coach, calls this “referability”. He identifies four habits that will sound so easy: 1) show up on time 2) do what you say 3) finish what you start. 4) say please and thank you.

To quote Sullivan, I suspect you’re thinking, “This is kids’ stuff.” I had the same reaction.  There must be something more, right? Think it through. There’s no better demonstration of trust than someone referring you to a friend or family member.  By doing these four things, we show people who we really are and whether they can trust us with their money.

Think of it as ensuring your actions match your works.  For example, if you tell clients that working with you will be a straightforward process, does your website support that claim? Or does your site match Solin’s assessment of many adviser websites:  “data-dense, boring, and filled with trite homilies”?

If you tell your clients you’ll help them with their financial planning, do you hand over a two-inch binder and call it good? Or do you help them make some assumptions as part of the process of financial planning and then check in regularly to see if they need to make a course correction?

Think through the last month and all the exchanges you’ve had with clients. How many times were you late? How many times did you say one thing, then do another? How often did you finish what you started? How many times did you say please and thank you? These small actions add up, but they’ll never be anything big if you aren’t doing them consistently.

Trust doesn’t come automatically in our business, but someone who is trustworthy has enormous power. You can claim some of that power when you understand that trust is one of the few differentiators in our industry that actually matters, both to you and your clients.



Written by Anastasia Georgiou, Morning Star


Please note: The opinions, beliefs and viewpoints expressed by our contributing authors do not necessarily reflect the opinions, beliefs and viewpoints of unbiased.co.uk

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Anastasia Georgiou. Morning Star

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