Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Advice clients seeking growth, not “risk aversion”
Choose your words wisely
Communication is one of the most important tools we have. It gives us the ability to exchange information with each other, it forms the foundation of all our relationships, and is the means that all humans use to connect.
The words we choose not only provide information but communicate a powerful message about who we are and how we are perceived.
Positive messages = stronger relationships
We all understand and have experienced the influence that positivity carries. It highlights what can be done, instead of what can’t. In short, it makes both speaker and listener feel good, inspires confidence and it shows that you care. Regardless of the situation, people automatically feel lifted when positive language is used over negative language.
An Invesco Consulting study conducted with Maslansky & Partners saw hundreds of advisers asked what they felt clients wanted them to do with their money; we then asked their clients the same question. The results are below, and immediately you can see the discrepancy in their responses.
Advisers: If your clients had to choose one, which do you think they would prefer? An investment that..?
9% Maximised their gains
91% Minimised their losses
Clients: If you had to choose one, which would you prefer? An investment that..?
69% Maximised my gains
31% Minimised my losses
The difference between advisers’ and clients’ opinions on investment goals may seem counter-intuitive at first because within our industry, advisers are keenly aware of the importance of minimising loss.
Yet the results speak for themselves – this research was undertaken during varying positions in the market cycle, and even during market turbulence. Ultimately, it found that most clients are much more interested and engaged with a message that looks to maximise their gains.
To understand this point, remember that we’re not asking clients about loss aversion here, we’re simply asking what their main goal is; and what the most engaging message is when working with their adviser, and for 69% of them, that is growth.
It’s important to remember that the main reason clients initially engage with an adviser is for growth and progress; and to not lose sight of or underestimate your client’s desire to talk about growth opportunities, even when markets aren’t favorable.
Positive messaging isn’t about avoiding negative conversations; it’s about leading with a positive outlook.
Advisers should always aim to actively cultivate positivity with clients. Markets will continuously fluctuate but the communication and messages clients are looking for from their adviser should never waver.
All advisers are leaders in their clients’ financial life, and despite what is happening in the market or the world in general, clients consistently look to their adviser for a realistic message of hope. Your language must dependably communicate positive messages; this translates to enthusiasm, confidence and credibility. Your long-term influence on clients is driven mostly by your likeability, and all of us naturally like people with a positive outlook and message.
Selecting your message with the most appropriate language, both spoken and written, and communicating your message in a way that encourages and inspires action, can turn even a potentially difficult conversation or challenging situation into an opportunity for increased loyalty.
Positive language isn’t about staying away from negative, difficult topics such as risk mitigation, or sharing unpleasant news with a forced smile – it’s about using language that reassures, motivates, and provides alternatives.
Invesco Global Consulting is a unique resource that exists to help advisers in the three areas all advisers consistently focus on – winning new business, retaining existing clients and growing their wallet and market share. We focus solely on the importance of the client relationship, methodically researching the language of our industry and the emotions associated with it to create actionable and implementable practice management and business strategy programs, assisting advisers across Australia.
