According to a recent survey, clients are more forgiving of bad investment advice from their advisor than they are of poor communication skills.
The findings were drawn from the John Hancock Trust Survey™, which polled mass affluent investors (household income of at least $100,000, investable assets of at least $200,000) in mid-April 2012.
Twenty-five percent of the survey respondents indicated that inaccessibility and unresponsiveness as the top reason for lack of trust in a financial advisor. Coming in a distant second, at 13%, was poor investment advice. The third most prevalent reason for losing trust in a financial advisor was the lack of a personalized approach.
While it is helpful to know that the quickest way to lose trust is to dodge calls, delete e-mails without responding, and ignore client text messages, it is also useful to know what you can do to build trust.
According to the survey, trust is most inspired by the following factors:
• Clear explanations of investment recommendations (54%)
• Knowledge and timeliness about products and trends (54%)
• Fee disclosure (51%)
• Responsiveness (49%)
Somewhat surprisingly, the following factors ranked relatively low in terms of the number of respondents who felt they were important in building trust in an advisor:
• Recommendation by family or friend (21%)
• User-friendly tools and calculators (16%)
• Informative website (11%)
• Community involvement (5%)
The results point to the importance of blending both expertise and communication. Clients want to work with advisors who understand and can explain sophisticated financial concepts, and who are accessible when needed and as needed.