In the wake of bank bailouts, ponzi schemes and devastating hits to most investors' portfolios through much of 2008 and 2009, financial advisors understandably developed a bit of a self-confidence issue that to this day prevents some of the best wealth managers in the industry from really connecting with investors who need their advice now more than ever.

While the entire financial services industry simultaneously bemoans and braces for more oversight and regulation, advisors out in the field have to do a better job of understanding and articulating the difference between independence and objectivity when it comes to dispensing investment advice to existing and prospective clients, according to a new research report released this week by SEI.

The in-depth survey of more than 250 private investors and wealth managers in the U.S., Canada and the U.K. found there's a communication disconnect between most advisors and investors when it comes to defining exactly what objectivity means to both groups.

Rather than focusing on taking the time to listen and ask the right questions, most advisors, the survey found, are far more interested in pointing to their reasonable fees or the availability of non-proprietary investment products as proof that they're "objective" when it comes to mapping out a client's investment program.

The problem with this inclination on the part of advisors to fall back on products and fee rates is that they're often wrongly assuming that the client or prospective client thinks they're objective not only about products and investment strategies they suggest but about the understanding where investors have been, want to go and how they're comfortable getting there.

"Advisors are playing defense when they should be playing offense," said Jim Morris, senior vice president for SEI’s global wealth services unit. "They spend too much time talking about the things they don't do. We don't give you our own funds. Our fees are fair. You can trust me."

"And the client is thinking 'we're not even there yet,'" he added. "You need to understand me better and know what it is I want to accomplish and what my risk tolerance and prior experiences have been so you come up with different investment products and strategies that I'm comfortable with."

The irony, of course, is that once a level of trust and mutual understanding is developed between an advisor and his or her clients, it's entirely possible that an in-house fund or product will actually be the ideal choice for the client and -- more important -- the issue of product independence is rendered moot.

"Establishing trust takes time," Morris said. "And post 2008, it takes even more time. It's back to the basics of listening and asking the right questions and not being so quick to jump to a solution or program whether it's independent or not. It's about being objective in how you view and understand your client."

When it comes to defining objectivity, 39% of investors said it meant "understanding my situation and my needs" while only 31% of advisors answered in kind. Another 17% of investors said it entails "delivering appropriate solutions" while 22% of advisors felt it was crucial to have "no conflicts of interest in delivering a solution," a distinction that clearly illustrates the preoccupation wealth managers have portraying themselves as above board and how that differs with investors' simple desire for the right investment product or plan.

Ninety-two percent of wealth managers identified "unbiased recommendations" as the number one way to convey objectivity to clients followed by fee transparency (81%) and access to non-proprietary products (80%).

"Independence is important and these responses show that wealth managers understand this," Morris said. "But objectivity is even more important from the start of the relationship. Then, later, when you bring a product to the fore, your client already knows you're objective and will trust and be more comfortable with your advice."