Building Consumer Trust, One Client at a Time

Robert Baranoff, FLMI, LIMRA’s senior VP of member benefits, rolled through some of the organization’s recent research on the topic.

Their observations? While 58 million Americans are aware they need a better handle on their financial planning, the recurring comment is that they’re looking for someone to trust – and Wall Street isn’t high on the list, at present.

To gain trust, Baranoff suggested employing a bit of behavioral economic theory in advisors’ discussions with their clients, including some simple notions:

• Tell stories and use your experiences to talk about the benefits of the tools you can provide
• Don’t go into incredible detail during a first client meeting
• Engage them and make the prospect feel like they’re a part of the process
• Help visualize the benefits and the positive outcomes of your services, and don’t scare them
• Consider products with multiple uses, where the money invested can be used for other purposes 

Other suggestions were equally helpful:

• Ensure that your clients understand what you’re doing
• Use tables and graphs to illustrate the benefits
• Personalize the presentation to the client
• Offer options, but limit them to three at most
• Explain all of your recommendations
• Above all, respect the customer – don’t talk down to them

Baranoff’s counterpart, Kathryn Reid, also added some good advice: buying anything isn’t a rational process, though this is the opposite of how investment products work.

Customers buy products based on emotion, to conform with others or because something happened to a friend and they want to prevent the same economic problems, she explained.

Therefore, it’s critical to take complexity out of the equation through the use of language, and help make it easier for clients to decide what they want to do.