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It goes without saying that without clients, there is no advisory business. And without trust, there are likely no clients.
Establishing and maintaining trust is arguably the most important thing an advisor. Yes, even more or equally as important as generating steady investment returns. When looking at the reasons why clients part ways with advisors, a lot of those factors boil down to trust-related concepts, even surpassing portfolio outcomes.
Admittedly, trust can be in the eye of the beholder and it can mean different things to various clients, but there is some uniformity. Issues such as lack of communication or poor articulation of fee structures can result in lost trust and thus lost business. Of course, it’s instructive to know what can cause trust to erode, but advisors also need to know how to build and maintain it.
One way of accomplishing that objective is building memorable moments with clients. With 20,000 moments in a day, there are plenty to pick from, even in a client meeting or phone call. No, advisors don’t need to take clients to Disneyland or otherwise go overboard in terms of creating moments. In fact, accomplish this objective is far less burdensome than many advisors assume it to be.
Memorable Moments with ABI
In a recent piece on the topic of advisors establishing trust with clients through the creation of memorable moments, State Street Global Advisors (SSGA) explores the concept of ABI – ability, benevolence and integrity.
Each are essential in building trust with clients and creating positive, lasting impressions and when combined, that trio of traits is a force for good for advisors.
“You might find some contradictions and surprises,” Dr. Gail Berger of Northwestern University told SSGA. “You may realize a person has ability and integrity, but not benevolence, for example. I think these are important distinctions to unpack as you continue to build relationships with existing clients and as you grow your business with new people.”
There will be times – plenty of them – in which advisors need to deploy ABI in singular fashion. For example, in an initial meeting with a prospect, it’s likely that person will be focused on advisor ability. Further out, a prospect or clients are going to emphasize integrity while benevolence and allowing clients to feel heard is an all-weather attribute.
Time Matters
Everyone wants instant gratification and for advisors, that can come in the form of wanting a prospect to trust them right away. However, as personal relationships taught us, trust takes time to build. Think about what SSGA says about the road of friendship. It can take 50 hours for person to move acquaintance to friend, another 40 hours to go from “casual friend to real friend” and another 100 hours – more than four days – to become a “close friend.”
Add that up and it’s 190 hours, or nearly eight days. That’s a decent amount of time and for advisors, it can be construed as a lot of effort. However, it’s not about cutting down on the time expenditure as much as it is conveying positive feelings to the person on the other end, which is actually the easy part.
“To build trust and fortify relationships over time, heed the magic 5:1 ratio of positive moments to negative moments,” concludes SSGA. “Think about your communication: Do you have too much negativity? Do you focus on the one thing a person did wrong instead of the 100 things they did right? Increase your ratio by reducing your negative comments and reinforcing good behaviors.”
Bottom line: By accentuating the positive, advisors can go a long way toward creating moments with clients and establishing trust.