As you well know, it takes a great deal more than just hanging a shingle outside your door to engender trust from your clients.
Trust is earned, and in business it's often earned brick by brick or consultation by consultation. It's not something anyone easily gives away, especially in these harrowing times, and investors — or rather, smart investors — are not especially known for their eagerness to work with someone they do not trust. And they've just given the collective profession an A+ mark.
A recent John Hancock Trust Survey from Boston-based John Hancock Financial finds that as a profession, financial advisors are indeed doing their jobs well, since investors place more trust in their financial advisors
than they do in their bosses, real estate agents, and even their primary care physicians, among other professions. Conducted by the independent research firm Mathew Greenwald & Associates, the online survey was directed at “mass affluent investors,” defined as individuals with at least $200,000 in investable assets and a minimum annual household income of $100,000.
Even in an era of economic tumult and uncertainty, it seems as though those Americans with experience working with financial advisors place the majority of their trust in financial advisors when compared to other professionals with whom the wealthy often come into contact.
According to the survey, investors ranked the professions they say they “trust strongly” accordingly:
- Advisors: 84 percent
- Primary care doctor: 79 percent
- Accountant: 77 percent
- Contractors: 52 percent
- Bosses: 49 percent
- Real estate agents: 43 percent
So, what makes financial advisors so trustworthy, anyway? What behaviors must advisors display to earn the trust of investors? According to the investors queried in the survey, being knowledgeable and timely about trends
and individual products were the most important, at 54 percent each. Next, at 51 percent, was advisor disclosures on how they are compensated, followed by how quickly they answered questions (49 percent).
Somewhat less important when it comes to trusting an advisor is whether he or she was recommended by family or friends, which was cited by only 21 percent of investors, possessing user-friendly calculators or other tools at 16 percent, and only 11 percent cited an informative website. Finally, local community involvement does the least to earn an investor's trust, at a mere 5 percent.
The survey also studied the other side of the coin, asking investors their reasons for not trusting a financial advisor. The biggest factor, at 25 percent, was being hard to get a hold of or being unresponsive. Delivering bad investment advice (13 percent) and not using a personalized approach, cited by 12 percent, also played significant roles in an advisor losing the trust of their investor client.
Now that you know what investors are looking for in a trustworthy advisor
, you'd do well to take these numbers to heart — even the bad ones. Become an exemplar of all the qualities investors seek in their financial advisor, and the trust will follow. Ignore this information, and do so at your peril.