Building client trust virtually

Building client trust virtually

The current pandemic has influenced the planner-investor relationship in such a way that online communication platforms are now a necessity.

Financial planners therefore face the question of whether this form of interaction will have a long-term impact on the levels of trust that investors have in the advice they receive, and ultimately their decisions to work alongside a financial planner.

Challenges with online communication

For many financial planners, the transition to using online communication tools has not been a huge challenge due to the technology we have available today.

However, if not handled carefully, this separation between planner and investor has the potential to negatively impact current relationships and has been reported to affect new client business.

Key points

  • Financial planners are asking if the transition to online communication platforms will have an impact on trust
  • Building rapport can be challenging because of the absence of non-verbal cues
  • People are more likely to take advice from those they trust

Firstly, certain online communication tools may not be accessible or intuitive for some older clients. Secondly, these methods interrupt the way in which financial planners generally engage with their clients.

For example, some find it essential to make visual annotations during review sessions, while others are keen to have face-to-face contact.

In contrast, investors’ learning styles differ in a similar manner; many may require visual aids, which can be difficult to navigate using video communication tools for example, and more so by those who are being contacted without the use of video.

Learning style preferences are important to consider as clients look to their financial planner for guidance with the intention to learn from their expertise and experience.

Although it is suggested that the majority of people (63.7 per cent) have multi-modal preferences for learning (that is, visual and audio), preferences for single modalities increase with age.

Recent data from the Vark database shows that for those under 18 years of age, 63.8 per cent have some form of multi-modality and 36.2 per cent have a single preference.

However, for those aged 55 or more, 56.8 per cent have multi-modal preferences and 43.2 per cent have a single preference (reading/writing 22.6 per cent; kinaesthetic/tactile 11.1 per cent; auditory (6.6 per cent; and visual 2.9 per cent). This increase in single preferences is particularly relevant as clients tend to be older adults, and further highlights the importance of using online communication tools effectively.

Building rapport

Many financial planners are currently turning to video forms of communication.

However, building rapport can be challenging due to difficulties in interpreting non-verbal gestures, since, for example, hand movements and seating posture cannot be seen, and maintaining eye contact is a struggle due to camera positions.

These factors can reduce levels of perceived trust and effect planner-investor relationships from both parties’ perspectives. Planners may feel less confident that they have a mutual understanding, which is vital when discussing financial matters.

Therefore, they may overcompensate regarding the level of verbal and nonverbal information they provide.