This week’s LIMRA annual conference came at an interesting time in New York City, and not just as those Occupy Wall Street folks raged on and some very high-profile insider trading charges were leveled.
Rather, about the most interesting experience I had, my trip to the city being one of only a few visits I’ve ever made, was hearing that the city would like to crack down on one of its least pleasant consumer experiences: the never-ending barrage of honking cab horns, 24 hours a day.
Riders, apparently, are now being requested to gently ask their cabbie not to honk so much and to pay heed to the signs warning of $350 penalties for laying on the horn. To which the cabbies, in their various native dialects, said something to the effect of “Fuhgidabowdit,” and then continued to drive 110 mph down Lexington Avenue, honking all the way.
Leaving poor pedestrians like myself feeling a bit more like Ratso Rizzo in “Midnight Cowboy” in the process.
Better customer service and trust was also on the minds of the LIMRA folks and a session I attended during the conference offered some prudent advice to all manner of financial advisors, including those in the wealth management area.
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.