Never forget the importance of building trust
Trust. It sits at the heart of a financial broker’s business. It’s that magic ingredient that you can’t survive without, but unfortunately you can’t just go out and buy it, or even simply ask for it. It can only be earned by what you do, and by what other people say about you.
Every year, I review the very insightful Edelman Trust Barometer, an annual, highly credible review of trust that has been carried out for 23 years now and across 28 different countries. They announce the results each year at the World Economic Forum in Davos. The full results for Ireland in 2023 are available here and are well worth a look. Edelman looks at trust in each of the countries (one being Ireland) and examines trust across different sectors and industries.
Two graphs in particular caught my eye this year.
The first is in relation to economic optimism and whether people believe they will be better or worse off in 5 years time. Maybe after Covid, the ongoing war in Ukraine and the recent cost of living crisis, it really is no great surprise that every country (with the exceptions of Sweden and China) sees a reduction in optimism since 2019. The levels of optimism have really fallen away in the developed world, and this is seen in the results for Ireland. Only 31% of Irish people believe they will be better off in five years time and this should definitely be a concern to policymakers.
Low trust in financial services
As can be seen from the graph below, Financial Services is one of the least trusted industry sectors in Ireland – a fact we simply cannot ignore. What is also worrying is that trust in the financial services is declining from an already pretty low base. Of course we need to consider how broad the financial services sector is, and how every scandal in one corner of the sector tarnishes everyone.
But this is a very important finding for all financial brokers to consider. While the poor level of trust applies to the sector as a whole and is no way reflective specifically of financial brokers, it underlines the challenge faced by all industry participants in building trust with potential clients. The situation is likely very different with your existing clients – if they didn’t trust you, they wouldn’t stay with you.
However the challenge is about appealing to all those people out there who maybe are looking to interact with the sector for the first time, or in a different way. They are sceptical of the financial services industry, and potentially this might include financial brokers. How do you appeal to people you meet for the first time, who may often be starting out with a sense of distrust and scepticism? This cannot be ignored by you, and your first task on meeting a prospective client is to face this issue head-on and start building trust…
It all starts with having a clear and compelling client value proposition, which is a clear, concise and compelling articulation of how the factors that are important to the customer are satisfied by you.
What is your business proposition?
To start to build a positive picture, leading to confidence in your ability in the eyes of prospective clients and ultimately to building trust, it’s worth considering the lessons of Simon Sinek, the famous author of “Start with Why”. Yes you need to be able to clearly define initially what it is that you do, so that clients can see the outcomes that they can expect. You then need to be able to communicate this effectively to clients. However it is difficult as a financial broker to stand apart from the crowd in terms of what you do, as many of you deliver similar services.
However when you can set out in an engaging way how you work with clients, now you’re starting to get somewhere. When you are able to demonstrate the processes that you use, how you deliver advice, how you will serve your clients throughout their financial lifetimes; you are now in a strong position to start building durable trusted relationships. Potential clients will take a lot of comfort from understanding what they can expect from you, and this comfort in working with you will enhance their trust.
The real magic though in building trust is when you can clearly (and of course credibly!) communicate why you do what you do. This will demonstrate your real reasons for being a financial broker, your passion for what you do and ultimately your desires to deliver a really top quality proposition to your clients. And when you can communicate this effectively, this will build trust like nothing else.
In a future article, we will look in more detail at some of the actions you can take to help you build a trusted position in the eyes of all of your current and potential clients.