Three ways to maintain client trust in the new normal

18 June 2021

How can advice firms increase levels of trust with clients? There are three proven ways, says Simon Binney, head of business development for Turo, at Wealth Wizards

A year ago, at the beginning of the UK’s first lockdown, many in our industry voiced concern that the sector would suffer. The main reason cited for this was that clients could no longer meet advisers in person. And the knock-on effect, the argument went, would be a breakdown in trust.

But advisers were swift to respond to the changing dynamics imposed upon them by national restrictions. They embraced new ways of collaborating, purchased new tools which were better suited to working from home, and they ran their client meetings through video conferencing. One survey, by Dynamic Planner, revealed a fifth of advisers said new business was now “higher or much higher” amid the crisis – with some reporting growth of more than 30 per cent.

So it turns out that those fears at the early stages of the pandemic were unfounded. And in fact, the new ways of working that have been forced upon us have actually done us good – a recent report found clients actually prefer advisers to take part in short update calls, instead of lengthy annual reviews, in person. The same survey, by Dynamic Planner, found that, counter intuitively, the pandemic meant that clients could access their adviser more easily and they cited this as being “crucial to building trust.”

This goes straight to the heart of the matter at hand – as we emerge from the global health crisis, how can the advice industry improve? And, fundamentally, how can advice firms increase levels of trust with clients? Here are three proven ways.

Change perceptions of the advice industry

An ongoing challenge for advice firms has been that consumers tend to view financial advice as a privilege exclusively available for the wealthy. But the circumstances we find ourselves in today have forced us to rethink our financial planning, to re-examine our relationship with work, and discussions around intergenerational finance have resurfaced.

This presents a unique opportunity for the advice industry to engage with younger, and often less affluent, groups who find themselves facing new financial challenges and pressures.

As DIY financial planning tools have gained popularity, the advice industry needs to fight its corner and demonstrate the strategic value it can bring versus these execution-only tools.

Embrace change

While the advice industry was fast to respond to the pandemic, there’s no denying that up until that point we were lagging behind other industries when it came to digital transformation. And there were good reasons for it. We’re in a space in which personal relationships count.

Following the Covid-19 outbreak, we need to assess what changed for the better and which working practices need to be brought back. This requires long term thinking to align with emerging consumer trends and new economic behaviours.

Advisers who are likely to win are those who conduct a thorough analysis of the market landscape and then ensure their technology stacks, customer journeys and marketing operations are aligned with those changes.

And that brings us to the third driver.

Integrating technology to increase productivity

Our assumptions that prospects and clients mistrust technology have been called into question by the pandemic. We’ve discovered that, actually, ad-hoc video calls are much more convenient for everyone. But we need to look at the role technology plays in our service delivery much more seriously.

Let’s consider how consumers feel, will automation of their finances really compromise trust?

The answer is no. Over the past five years we have become so used to engaging with automated technologies that we’ve hardly even noticed. And if there is one thing the pandemic has proven to our industry is that we are not in fact an exception.

One US report found that 85% of respondents said tech should complement, but not replace, human advice. Meanwhile, a separate survey indicated that consumers actually trust robots more than humans to handle their finances.

That doesn’t mean technology is a competing force. Instead, advisers need to look at how technology can complement their services. How can automation reduce administration? And if it can, how much less time and money will that cost the business? Or in other words, by how much will that boost productivity?

Consider what you could do if fact finding wasn’t so time-consuming. Our internal data shows that 95% of clients who have been sent fact finding elements to pre-complete, prior to a planned meeting, have completed them, saving between 30-45 minutes of time, better spent focused on client objectives. And that’s actually higher than you’d expect when going through the same process with a human.

Integrating automation tools enables advisers to focus more on their core activities, thereby delivering more value to customers and boosting productivity. And, in doing so, they’re able to bring down customer acquisition costs, enabling them to reach the younger and less affluent groups we discussed earlier.

The last year has made us ask some tough questions. Over the next 12 months we’re going to see a clear separation between the firms that are responding to those questions, and those who are not.

Professional Paraplanner