Build­ing Trust Amid Skep­tics

In to­day’s world, clients and prospects will ques­tion your mo­tives, chal­lenge your facts and re­spond emo­tion­ally.

Financial Planning - - Contents - BY JOHN J. BOWEN JR.

In to­day’s world, clients and prospects will ques­tion your mo­tives, chal­lenge your facts and re­spond emo­tion­ally.

In­vestors have grown more skep­ti­cal about the fi­nan­cial ad­vice they’re get­ting — and of the pro­fes­sion­als of­fer­ing that ad­vice.

Of course, it’s not just the fi­nan­cial ser­vices in­dus­try that has peo­ple wary. Other ma­jor in­sti­tu­tions — govern­ment, cor­po­ra­tions and the news me­dia — are all viewed these days with ris­ing sus­pi­cion and dis­trust by a sig­nif­i­cant num­ber of Amer­i­cans.

The re­sult: We live in what Michael Maslan­sky, con­sul­tant and au­thor of

“The Lan­guage of Trust:

Sell­ing Ideas in a World of Skep­tics,” calls a post-trust era. When prospec­tive clients first meet you, they won’t im­me­di­ately give you the ben­e­fit of the doubt (as in­vestors in the old days did, we like to think). More likely, their start­ing point will be un­cer­tainty and doubt about whether they can trust you.

But by adapt­ing how you present your­self and your ideas, you can start to build trust and get in­vestors to engage with you from the first in­ter­ac­tion.

Maslan­sky has pre­sented his in­sights and strate­gies to elite fi­nan­cial ad­vi­sors at my firm’s events, and here is an over­view of what he shared with the groups.

Trust can be hard to come by these days, for a va­ri­ety rea­sons. One be­ing the mas­sive shift in how we con­sume in­for­ma­tion in the

mod­ern age.

By con­nect­ing to the in­ter­net or turn­ing on CNBC, in­vestors can feel as if they know as much as the pros about the mar­kets and in­vest­ing. The key word, of course, is feel.

They might not ac­tu­ally be more so­phis­ti­cated, but they think they are be­cause of how easy it is to ac­cess high-level in­for­ma­tion. What’s more, no one has a mo­nop­oly on a point of view any­more.

Any­thing you might tell your clients or prospec­tive clients has a con­flict­ing ar­gu­ment made by some­one else, and that view­point is in­stantly ob­tain­able on­line. More­over, those opin­ions are of­ten pre­sented as facts, rather than a point of view.

Armed with all this pseudo knowl­edge, peo­ple enter into con­ver­sa­tions with less trust than ever be­fore. In to­day’s world, you can count on clients and prospec­tive clients to ques­tion your mo­tives, chal­lenge your facts and re­spond emo­tion­ally, not ra­tio­nally.

So now you have to ac­tively over­come skep­ti­cism just to start a re­la­tion­ship and per­suade peo­ple.

How can you more ef­fec­tively say what you want to say in a way that builds trust from the be­gin­ning?

Start with the con­tent it­self, but shift your ap­proach from one that is ini­tially fo­cused on data to one that stresses con­text.

In­stead of start­ing with a bunch of facts, for ex­am­ple, start by telling the per­son why you are go­ing to give

Stay pos­i­tive. Neg­a­tiv­ity may work well in politics, but in fi­nan­cial ser­vices it only breeds con­tempt that can lead to re­jec­tion or paral­y­sis.

them the facts. De­velop a nar­ra­tive with them that has an over­all fo­cus on their goals and long-term plans, which can then be used as a ba­sis to have a con­ver­sa­tion that in­cludes all the facts and fig­ures.

Next, con­sider your tone. Avoid big and bold state­ments that might not sound cred­i­ble. Don’t over­promise or puff up your abil­i­ties. And fo­cus on out­comes. You don’t need to tell in­vestors why they should like your mo­tives. You just need to tell them about the things you will help them ac­com­plish.

Try fol­low­ing what Maslan­sky calls the four prin­ci­ples of cred­i­ble com­mu­ni­ca­tion. Here they are, with brief de­scrip­tions of each:

1. Be per­sonal. The more time you spend talk­ing about prod­ucts and ser­vices and fo­cus­ing on your­self, the less per­sonal you will seem.

You’re bet­ter off spend­ing more time talk­ing about the prospect, the client, their goals and pref­er­ences, their chil­dren and in­ter­ests and so on.

Sounds ob­vi­ous, right? Too of­ten, ad­vi­sors fo­cus on the busi­ness side of client in­ter­ac­tions — get­ting through the num­bers and the as­set al­lo­ca­tion de­ci­sions and the like — and short­change per­sonal as­pects of the con­ver­sa­tions. Keep in mind: any con­ver­sa­tion you have would ben­e­fit if you spend a bit more time on the per­sonal side and less time on the busi­ness side.

2. Be plain­spo­ken. In the past, if peo­ple didn’t un­der­stand you they would think you were smart — and they’d tend to go along with your sug­ges­tions. Now, if they don’t un­der­stand you, they’re go­ing to find some­one who they do un­der­stand. In one re­cent coach­ing pro­gram, Maslan­sky cited an ex­am­ple of the vari­able an­nu­ity busi­ness, where ev­ery brochure men­tions longevity risk — a con­cept that, while crys­tal clear to the ad­vi­sors, did not res­onate with clients. The so­lu­tion was to re­frame the dis­cus­sion around a sim­pler idea: not out­liv­ing your money.

In the past, if clients didn’t un­der­stand you, they’d think you were smart and tend to go along with your sug­ges­tions. Now, they’ll just find some­one else they un­der­stand.

Think about how much jargon is in your daily con­ver­sa­tions with clients and how much of it they prob­a­bly don’t un­der­stand. Do they re­ally know what cor­re­la­tion is? Or al­pha?

Un­less your clients have a per­son­al­ity type that deeply val­ues the in­tri­ca­cies of the mar­ket, prob­a­bly not — which means those re­la­tion­ships are at risk. So ask your­self: Do peo­ple re­ally un­der­stand what you are say­ing to them, or can you be clearer in your ap­proach?

3. Be pos­i­tive. Neg­a­tiv­ity may work well in politics, but in fi­nan­cial ser­vices it only breeds con­tempt that leads to re­jec­tion or paral­y­sis. Maslan­sky sur­veyed a group of in­vestors about whether they wanted in­vest­ments that helped them “take ad­van­tage of op­por­tu­ni­ties” or in­vest­ments that helped them “avoid threats.”

The vast ma­jor­ity wanted to cap­ture the op­por­tu­ni­ties. And yet, threats and scare tac­tics are com­mon when it comes to mes­sag­ing aimed at re­tire­ment sav­ings. And wealth man­agers have a ten­dency to talk about how they man­age risk. But most clients are not in­vest­ing to avoid loss. They want to gen­er­ate some kind of re­turn. If you fo­cus too much on risk, you miss an op­por­tu­nity to build trust.

4. Be plau­si­ble. You have to find ways to build cred­i­bil­ity, be­cause noth­ing else mat­ters if prospects and clients don’t be­lieve you.

When Maslan­sky worked with a global food com­pany try­ing to change its im­age, he started with a mes­sage that the com­pany was now mak­ing healthy food. No one he tested that mes­sage on be­lieved it. So he be­gan say­ing that the firm was striv­ing to make health­ier food. That sub­tle shift got peo­ple in­ter­ested in learn­ing more about it be­cause it was a more plau­si­ble mes­sage.

In our busi­ness, if you ask peo­ple whether they will put their port­fo­lio in an in­vest­ment or put a por­tion of their port­fo­lio in an in­vest­ment, in­ter­est is much greater when the word “por­tion” is used. By re­duc­ing what you ask for, you can gain more cred­i­bil­ity and po­ten­tially cap­ture more as­sets than if you ask for all the as­sets.

Of course, you might never di­rectly ask prospects to man­age all of their money. But the re­search shows that un­less you specif­i­cally say the word “por­tion,” peo­ple will as­sume that you are ask­ing them for all their money — and they will be turned off. So be plau­si­ble and spe­cific.

Ul­ti­mately, you will earn trust by your ac­tions over time. The seeds of that trust are planted the mo­ment a prospec­tive client comes in con­tact with you.

Given the uphill bat­tle we all face in to­day’s post-trust and al­ter­na­tive facts world, it makes sense to fo­cus as much on how we com­mu­ni­cate with oth­ers as on what we com­mu­ni­cate so in­vestors will engage with us and take our ad­vice.

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