Client-Advisor: The Art of the Relationship in Advisory

It’s no surprise that potential clients are just as nervous to meet a prospective advisor for the first time as the advisor is to meet them. Why is that?

For one, the prospective client often doesn’t know what to expect. Two, they know they don’t want to experience an uncomfortable situation. Money is personal and, for some people, an embarrassing topic. How many of your advisors lead with a portfolio analysis conversation (starting out with a cold conversation filled with industry jargon) versus discussing what the client wants to achieve in life?

Take buying a new car. Very few people look forward to that experience. Not only does the pressure start from the moment you get out of your car in the parking lot, it continues throughout the whole process, including the end when the “extras” portion of the sale comes. Throughout the experience, there is a tendency for the customer to feel a little nervous or uncomfortable. None of us enjoy being told what we “just need to have...” or “you should…”. Instead, the key is to listen to clients and try to understand what they need, rather than telling them what they need. When done effectively, it demonstrates care about their beliefs, attitudes, and goals and builds the trust that the advisor is acting with the client’s best interest in mind.

Equipping Advisors on How to Instill Trust with Clients

There are several critical elements of a meaningful relationship—a growing relationship that lasts a lifetime and beyond. In fact, a recent study showed that trust tops the list of reasons that a client selects a financial advisor. Sometimes, these elements are considered soft skills. Often, the soft skills outweigh the hard facts and quantitative analyses when clients determine trust and value. Firms must focus on providing advisors with the tools, resources and support that enable them to deliver on the following trust elements:

  1. Being Knowledgeable: To forge a successful relationship, advisors must be well-versed in the latest financial services products and services, available options for the clients from their workplace and the pros and cons of making trade-offs (since clients’ goals will likely outnumber the funds available to achieve those goals). Advisors will be positioned to meet a prospective client where he or she is, and ask questions from a position of true understanding. A little prep work goes a long way when establishing trust.
  2. Asking the Relevant Questions: “What is your most pressing need?” or “What is your biggest concern?” Asking open-ended questions will enable advisors to truly understand what is at the heart of the matter when discussing a client’s financial situation. By encouraging advisors to talk “with” their clients and not “at” their clients will help build a trusted and lasting partnership focused on personal goals – not simple a broker who handles monetary transactions.
  3. Actively Listening: Active listening is critical to building trust with clients. This includes taking notes, asking follow-up questions, making eye contact, and turning off phones. Advisors may view these elements as “little”, but they each contribute to the client’s experience. And instilling of trust. How well do your advisors actively listen and engage with clients?
  4. Keeping Up with Trusted Relationships: Advisors are in a relationship business. Value is no longer calculated by making a client more returns than an index; it is about building a trusted relationship and connecting clients to what they need – even if the solutions are not provided by the advisor. Advisors have many relationships, but few know how to routinely keep them strong and active. Advisors need a system that encourages them to proactively meet with influencers and potential and current clients. With hundreds/thousands of clients in a book of business, advisors cannot afford to push relationship building on the side of the desk.

In the advisory business, the quality of an advisor’s relationship with her/his clients is strongly correlated with the trust a client has with a company. A company, therefore, must ensure advisors and teams have the needed tools, technologies, processes, and training to enable comfortable and confident conversations. The entire ecosystem must come together to create connections: for the client-advisor, client-company, and advisor-company.

All of these vital soft skills can be easily lost in the current pressures that financial services firms face to differentiate themselves in AI, digital and robo-advice, to name a few. But, clients and prospects continue to state that a personal relationship is still important and critical when making financial decisions. Thus, companies must have a strategy, training, incentives and support plan to bring back the basics of building trusted relationships with clients, ensuring that the art is not lost in the science.