Building client trust virtually

Clients’ feelings and emotions must also be understood by their financial planner; however, this can be hindered by using such tools.

From the perspective of the client, they must feel comfortable and confident in their financial planner, which may be challenging without face-to-face communication, especially if they have never met in person.

Regular contact

Today, we share personal information, communicate in groups, and provide open access to data online, therefore implying a certain level of trust. However, in order to develop this level of trust, regular communication and maintaining this communication over a sustained period is required.

Although academic research has showed that video and audio forms of communication can lead to similar levels of trust as face-to-face communication, there is evidence that it takes longer for this level of trust to surface, and at this state it is more fragile than trust built through face-to-face communication.

Further research demonstrates that while richer forms of communication (that is, face-to-face) are important for initial contact, leading to greater ratings of responsiveness, closeness and liking, follow-up interactions using video tools can balance such ratings regardless of the original form of communication.

Video conversations can therefore be as effective as face-to-face once a relationship has been established, but there is a need for regular communication, particularly when interacting with new clients.

Providing support as well as advice

In any relationship, the ability to accurately empathise and provide compassionate support is essential.

Those who do so in online communities are found to be more trustworthy; presenting their personality through the information and stories they share leads to greater trust.

Emotional aspects of trust are important for the planner-client relationship and clients are more likely to take advice from those they like and who are empathetic, rather than mere experts in the field.

Trust based on these emotional factors can be more significant than a financial planner’s credentials and charges.

Financial planners are unable to maintain relationships in many of the ways that they have done in the past as there are currently no opportunities to meet with clients.

There are approaches that planners can use to build personal relationships and a sense of trust with their clients, particularly those of older age.

Arranging regular calls to enquire about their clients’ health (physical and mental) in isolation is a really important step that a planner can take. Discussing both financial and non-financial matters is essential during these times and will be beneficial to a client’s overall wellbeing, both mentally and financially.

Issues with trust and compatibility were leading factors affecting decisions to seek professional financial advice even before the onset of Covid-19.