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Proving Your Value to Skeptical Clients

20 March 2018
2 min read

In personal relationships, emotional connections are powerful and positive: they inhibit selfish behavior. If you matter to me, I constrain my behavior to preserve our relationship; I refrain from being completely self-serving. If you matter to me, I’ll share that last piece of cake.

The advisor/client relationship is more complicated because it combines personal and business dynamics. We often become friendly with our clients, but we still expect to be paid and clients expect to receive meaningful value.

Accepting that fee means you’re motivated at least partly by self-interest. So how do you show clients that their needs matter more than your own? How do you prove their best interests are more important than yours?

The Trust Equation

The answer includes showing goodwill and being seen as trustworthy.

Unfortunately, it isn’t that simple; just sharing that piece of cake won’t cause you to completely trust me. You can’t cause trust with a few simple actions. Instead, trust develops after a series of experiences; it builds up over time. There’s a huge difference in the levels of trust between people who’ve worked together for 20 years versus a much shorter relationship. Fortunately, there are specific behaviors that stimulate feelings of trust, as seen in the trust equation (Display).

The Trust Equation
The Trust Equation

Consistency Plus Experience

Think of a relationship as a stack of blocks built up over time . When you show goodwill, you add another block. But if at any time the client doesn’t believe you’re looking out for her, trust can be broken and the relationship can shatter. Once a client thinks, “I don’t trust you,” it’s extremely difficult to go back. In contrast, if you often and intentionally provide reasons, the client should trust you and the relationship should become more stable (Display).

Goodwill Plus Professional Competency

Goodwill develops when clients see evidence that they matter—when you show them that your actions and decisions are focused on their goals, not on generating fees or making your life easier. But goodwill isn’t enough; you must also be skillful. You need to respond rapidly and warmly, reveal your knowledge, and proactively advise clients about hidden dangers and opportunities.

Time After Time

The four factors (consistency, experience, goodwill and professional competency)—the building blocks—must be exhibited repeatedly over the years to inspire deep and abiding levels of trust. Experienced advisors acknowledge that clients who have worked with them for at least five years tend to maintain more tenacious levels of trust than newer clients. So start now. Think of what you can do to show your clients they matter to you and what steps you can take to begin developing their trust. This is one method to overcome the challenges of working with high-net-worth clients.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.

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