Trust is a vital element of any business relationship, but in financial advising, it’s absolutely essential. Your clients are giving you influence over one of the most important parts of their lives: their finances.
The stakes are high. As we all know, following bad or unscrupulous financial advice can lead to ruin, and clients are acutely aware of this - especially having witnessed the fallout of the Great Recession.
Trust becomes especially important when you’re dealing with senior clients or retirees. They’ve spent decades building up a nest egg to see them through their non-working years, and protecting that asset is a primary goal.
Perhaps that’s why these clients can sometimes be the ones who withhold their trust the longest. It makes sense - they’ve got the most to lose, after all, and fewer years in which to recover from a financial setback.
How can you build trust with your more reticent clients? Here are a few pointers.
Be friendly and personable, but always professional.
If you’ve been a financial advisor for some time, you’re likely skilled at meeting new people and putting them at ease. You also probably know how to relate to people of different generations, income levels, and other differentiating factors. Younger clients might prefer a more casual business relationship. High-income clients might want a much more formal, hands-off relationship.
In general, with older clients you’ve got to strike a balance. Being friendly and personable is crucial in order to put them at ease, but you also have to convey your expertise. This is especially true if you’re younger than your client, as age bias can play a role in how they view you.
Show them that you’re an experienced professional by always dressing the part, even if that means dressing up more than you normally would on days you have meetings with them.
Make sure any certifications you have are on display (unobtrusively, of course) either on your walls or listed in your email signature.
Brush up on knowledge related to topics they’re likely to inquire about, like retirement issues, tax issues, Social Security, life insurance, and healthcare.
Be guided by their interests, goals and desires - not your own financial interest.
We’ve all experienced that sinking feeling we have when we sense that the person we’re talking to is trying to sell us something - that he or she isn’t working in our best interest, but in his or her own.
There’s little that will erode trust more quickly.
Every good financial advisor knows that long-term relationships with clients are the most beneficial, both from a career-building and financial standpoint. However, sometimes it’s hard to ignore the fees, commissions, or other benefits you’ll get from selling a product or facilitating a transaction.
If a client isn’t interested in a product or service - even if it’s something you think would benefit them greatly - after you’ve made a case for it, accept their decision and move on.
Be honest about what you know and don’t know, and never overpromise.
In finance, there’s very little that’s certain. There’s also an ever-growing list of topics to learn about, and no financial advisor can have extensive knowledge of them all. Life settlements are just one of these topics - many financial advisors aren’t aware of how life settlements can help seniors add value to their retirement funds or pay for healthcare.
If you want your more cautious clients to trust you, you’ve got to be honest with them when you don’t know something. But you can’t stop there.
If you really want to demonstrate your value to clients, research whatever it is they want to know about, and get them that information during your next meeting. Going that extra step will help them feel confident that you do have their best interests at heart, and are willing to do what you can to help them reach their goals.
Above all, remember that building trust requires time. It requires building a relationship with your older clients - one that’s based on helping them meet their financial and retirement goals. For more on how you can improve your services for seniors, read our post “How Financial Advisors Can Better Serve Their Senior Clients.”