Potentially more so than other financial professionals, advisers are privy to a greater portion of their client’s lives. From lifestyle choices to ambitions for retirement, knowing a client personally to better help them.
Because of this, trust becomes vital for the client-adviser relationship.
“Clients want someone they can trust, someone they feel cares and has their best interests at heart. That’s the foundation of a lasting relationship,” Shelly Lobartolo, client service officer at Complete Wealth, said on the latest episode of the ifa Show podcast.
“Most of the time, clients’ problems have emotions attached to them. It’s about bridging the gap between being a technical decision-maker and being someone they trust. You can have the best strategy in the world, but if the client doesn’t feel safe implementing it, it won’t happen.”
Also appearing on the podcast, adjunct professor at Central Queensland University and adviser at Complete Wealth Dr Ben Neilson agreed.
“What we found was that the contingent of progressing with a financial adviser was four to one — one being rational and four being behavioural,” he said.
“If I trust you, if I think you’re a good human being, I’m four times more likely to go with you than if you say to me, ‘You should do x and y because it makes economic sense.’ And that’s why understanding emotions isn’t just nice to have. It fundamentally increases the likelihood of success.”
Building a practice that offers security for clients, according to Neilson, requires advisers to know what each touchpoint and meeting should establish, such as using the first meeting for creating trust, and generally avoiding strategy.
“You address anxiety, vulnerability and uncertainty with things like active listening, empathetic questions, and normalising their situation. We were building the psychological safety so that they could feel these feelings — and then move forward.”
Once that trust is established, according to Neilson, then strategy can be introduced.
“In the second appointment, because we had built that safety, they didn’t need any of that reassurance anymore,” he said, referencing examples from his research.
“They wanted the modelling, the projections, the reframing, the technical language. They wanted to know all the specifics because they had already identified that they trusted you. The confusion very quickly merged into curiosity.”
For Lobartolo, advisers also must see their clients beyond a simple set of tasks, a habit she believes some can fall into.
“It’s very easy for an adviser to sit behind a desk and treat cases as tasks because they’ve done them day in, day out. But clients come in with fears, hopes, and baggage. Treating people like people — recognising the emotions behind their problems — is what changes the relationship. That’s how trust is built.”
Small steps, such as simplifying complex ideas, can also help create that safety, encouraging clients to be more open, such as using metaphors.
“[Metaphors] make these big, complicated structures — selling a property, minimising tax, restructuring into super — very doable,” Neilson explained.
“We want two or three metaphors that simplify the concept so clients can understand it. When they feel understood and the strategy feels simple, trust skyrockets.”
To hear more, tune into the ifa Show here.
