Building Trust Is Essential In Financial Advisory. Here's How.

| 08 Sep 2020

Building trust with their clients is always the key to a financial professional's success no matter the knowledge skills, and experience, says Kathryn Reid, vice president and head of LIMRA's Talent Solutions. She shares in this article how small changes can have a big impact on sales results regardless of whether sales interaction is face-to-face or virtual.

The spread of COVID-19 and the resulting economic fallout have upended many families' financial and physical well-being.

While China's economy seems to be recovering, there are so many unknowns about when an effective vaccine will become available and whether there will be a second wave of infections in countries that have slowed the spread of the virus.

Social distancing measures have been very successful in helping to combat the spread of COVID-19, but it does present a challenge for the financial services industry.

The face-to-face engagement between agents and advisers and their clients has been a cornerstone of how we connect with consumers and help them achieve their financial goals.

Throughout the world, agents and advisers have had to adapt their practices and leverage digital tools to meet with their clients and prospective clients virtually.

But does use of these tools undermine an agent's ability to build consumer trust to help them achieve their financial goals?

New LIMRA research shows that more than 3 in 10 consumers in China have no life insurance coverage, and nearly a quarter feel they are underinsured. Yet, only 37% say they have a primary financial adviser.

Our research shows that consumers are more likely to buy life insurance and other financial products with the help of a financial professional. How can our industry engage more consumers to help them make the right financial decisions for them and their families?

For more than 30 years, I have dedicated my career to building assessment and training programs to help agents and advisers be more successful.

Recommended: Inspirational Agency Leader of the Year 2020 - Wong Ching Lih

What I have learned is — no matter the knowledge, skills, and experience of a financial professional — building trust with their clients is always the key to their success.

In China, 56% of consumers who say they need more life insurance say they don't buy the coverage they need because they don't trust life insurance agents in general.

How can our industry help agents and advisors establish trusting relationships with their clients to ensure they take the necessary steps to be financially secure?

Over the past century, LIMRA has been developing effective, science-based producer assessment and training programs to help our members and their sales teams reach the families who need the financial solutions they offer.

But over the past few decades, our research shows consumer trust in our industry and our sales professionals has fallen precipitously. We knew we needed to develop a program that would help bridge the trust gap that had been growing.

To help our industry address the trust challenge, LIMRA partnered with the Hoopis Performance Network (HPN) to develop Trustworthy Selling.

Using HPN's proven language and techniques and LIMRA's research insights on consumers and their behaviours, this training equips financial professionals with the knowledge and skills to engage today's consumers on their terms and — as a result — increase their sales. 

As we built Trustworthy Selling, we found that small changes in the language and the methods that financial professionals use can have a big impact on sales results regardless of whether that sales interaction is face-to-face or virtual.

The methods presented in the course help build that trusted relationship, which led to almost a 30% uptick in productivity for those who took the course, as demonstrated by a case study published by ATD. 

With the situation brought on by the current pandemic, Trustworthy Selling had to be flexible to meet the needs of different agents and advisers. Agents and advisers can take the training in person or in a virtual environment — whichever best suits them. For many, being able to participate virtually is one of the benefits of the program itself because it enables advisers to more readily adapt to serving their clients and prospecting virtually.

Read more: Lessons from the Pandemic - How do we take control of our financial health

The basic tenets of the training program are the same whether an adviser meets with their clients in person or in a virtual setting.

At a time when everyone is struggling to adjust to new ways of doing business, here are five behavioural economic techniques from our program that agents can use with their clients to build trust and improve effectiveness.

  1. Use personal experiences to help people see how others have benefited from having financial and/or protection products in place when the need arose.
  2. Avoid ambiguity and explain concepts and principles in clear, easy-to-understand terms.
  3. Use visualisation to help the prospect envision or see how your solution will get them to where they want to be.
  4. Help potential clients classify the expense and see how having a particular product (or products) can satisfy more than just one of their needs or financial goals.
  5. Use generally accepted heuristics or "financial rules of thumb" to give people an idea of what others have done when dealing with the same subject.

It is a difficult time for everyone. Our industry's mission is to help people address their financial challenges. While there is much we cannot control right now, we need to work together as an industry to adjust and find innovative ways to build clients' trust and help them protect their loved ones. 


Kathryn Reid is vice president and head of LIMRA's Talent Solutions. In this capacity, she leads a professional team of training and development experts to deliver global solutions to help member companies recruit, select, assess, and onboard new talent.


Subscribe to our weekly newsletter to get the latest:

Special: Download Insurance Inspired Virtual Summit Videos Now