Financial Advisor Credibility

[reading time:  3 minutes 20 seconds]

Credibility Alert!

The Rand Corporation and the federal government just dropped a bomb on the financial industry.  Their new 228-page Report was released recently. It's titled: Investor and Industry Perspectives on Investment Advisers and Broker-Dealers.  It contains some astounding revelations, including this - that clients do not see advisors in the same way advisors see themselves.  Perhaps, the most telling statistic is on page 98. It contains this simple statement about financial professionals:

“I trust that this individual acts in my best interest.”

Can you guess what percentage of the investing public believe that?

92%
85%
71%
50%
Less

Only 40.2% of the combined respondents strongly agreed.

We think this is one of the most important bits of research that you may ever see. It is almost a condemnation of the financial industry's credibility. It says that significantly less than half of the investors trust financial professionals. What's going on here?

You know your own credibility.  You know your own intentions.  You know your own level of client care.  We have found that the vast majority of advisors are credible, well-intentioned people.  What's missing?  Clients do not see your actual credibility;  they only know what they perceive.  Across the financial industry, if clients are questioning advisor credibility, it's simply because those advisors have not learned how to marry their good intentions with their actions and behavior.

The Disconnect.  From our own work in psychology and neuro-linguistics, we know that there is often a disconnect between intention and behavior.  No two people share the same perception of anything.  You have the best intentions for your client, but something in your behavior works against you and transmits a conflicting message to the client. 

The "red flag" is typically triggered by something miniscule.  It could be as simple as a change in where your eyes look or when you move your eyebrows.  Or, it could be as simple as using a wrong word.  Any of those things can cause doubt to pop into that client's mind.  And, when it does, what gets damaged is the client's perception of your credibility - not your actual credibility.  You remain the same credible person, but the client is gone.  When you focus on the client's perceptions, you will begin to solve that problem.

Over the years, the people who respond to our articles, and ask for our newsletter, are people looking for answers and solutions to this puzzle.  They understand the value of client relationships and professional credibility.  They understand the need for consistency and congruence between perception and reality.  They come to us to learn the skills that will get that for them.  In the past six months, we've developed an approach to solving all those problems.  We call it the "Credibility Process."  And, it is a simple schematic for the skills and knowledge that bridge the gap between perception of credibility and actual credibility.

What does this mean?  Being aware of these things gives you some invaluable information.  No matter what your role, you can use it to improve your business.  Here are a few ways:

1.  For advisors, all you have to do is look around and see your competition.  What are they NOT doing?  They are most likely NOT adapting to client perceptions.  So, your job is made simple.  Use the Credibility Process to guide you in building your business by leaps and bounds.  It is easy to position yourself against people who ignore the reality of client perceptions.

2.  For managers, the Credibility Process gives you a schematic, a strategy on which you can build a "culture of credibility."  Since new business, retained business and referrals all depend on trust and relationships - rather than performance - the Credibility Process is your ticket to accelerating the velocity of growth by helping your advisors avoid making credibility mistakes.

3.  For wholesalers, it opens a wide window into an opportunity to connect with producers.  Instead of showing them more product, you could help them move along the Credibility Process.  Using this simple approach will show your advisor clients how to: 1) expand their relationships with their clients, 2) move to the position of being the Primary Advisor.

Pam and I have been teaching financial professionals how to build their credibility for about ten years in our coaching and training.  Most of the training has been sponsored by large firms and organizations.  We have not done a public workshop in many years.  Considering the information in the Rand Report, we see a more pressing need to reach out and help the industry recover.  So, let's see how we can use training and coaching to turn that perception around for you.

What next?  If you could design a training event that would equip you with the exact knowledge and skills necessary to prove that you are a well-intentioned, credible professional, that you want to (and know how to) build meaningful, relevant relationships with your client – what would it include?

Here are a few examples:

   ► Improve client receptivity to your ideas.
   ► Make sure your message really connects with the client.
   ► Non-verbal behaviors that resonate with clients.
   ► How to determine a client's values.
   ► How to show that you are relevant to the client's needs.
   ► How to establish safety and trust with prospects. 
   ► The answers to your specific credibility questions!

The training event is real.  It will take place the week of May 19 in Charlotte, North Carolina, and we will be joined by are good friend Paul Scaffidi.  Tuition is $250.  If you would like to attend and get a $50 discount, look back at that last item in the list.  We want this program to be absolutely and personally relevant to you, so if you'll send me your credibility questions (michael@aboutpeople.com), I'll make sure you get a $50 discount on the tuition for this first Advisor Credibility Workshop. 

Find AboutPeople resources at:  http://secure.megatrans.com/aboutpeople/Catalog