Market downturns and periods of volatility give planners an opportunity to build trust among clients, at least if they handle matters deftly, according to results from a survey released by public relations giant Edelman.
In its 12th annual global survey measuring consumer trust levels for 11 industries, the firm found that less than half of respondents, 46%, trust the financial services industry, and only 41% of respondents said they trusted banks. The survey sampled 25,000 general population respondents in 25 countries. All respondents were college educated, had a household income in the top quartile for their age in the country; and routinely followed business and public policy news and media.
The findings were a marked improvement over last year’s showing, when trust in financial services bottomed out at 25%, according to Edelman. Yet much work remains for the financial services sector, when it comes to gaining trust from potential customers.
Of all 11 industries rated in the survey, the financial industry came in last. The findings provide several opportunities for financial planners to build trust in their business models, according to Edelman executives.
“If you, as a planner, face a crisis in the markets or something you were personally involved in, it is important to do the right thing,” says Julie Crothers, senior vice president of the financial communications practice group at Edelman. “It can provide an opportunity to build trust.”
Whatever the crisis, financial planners should communicate with clients quickly and transparently, Crothers says. An advisor should explain to clients what the issue is, and the action he or she plans to take. Edelman also found that academics and third-party experts were considered to be the most credible spokespeople.
“For planners, the lesson is that if you can find an academic paper or book that supports the message you’re trying to communicate to your clients, that will carry a lot of weight,” Crothers says.
Another way to build trust is training employees well, Crothers says. “Your employees can be your best brand ambassadors,” she says. “They understand your business’ values and ethics, so they can reinforce that message whenever they have conversations.”
Donna Mitchell writes for Financial Planning.