Trust is the foundation of all financial sales.
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Trust is what drives all transactions, from the initial agreement to all subsequent actions. In order to have any chance of sustaining a long term career as a financial advisor, you must find a way to not only secure but retain the confidence of your clients.
This series of brief articles will detail for a prospective new financial advisor specific ways to enhance your credibility.
As a district manager for a large financial services company, I was privileged to sit in more than 1,000 meetings with clients. The meetings I attended were with all types of people -- young and old, wealthy and not so wealthy, and all manner of background and ethnicity.
Because of this experience, I gained valuable insight into the key elements that drive client satisfaction and dissatisfaction. The interesting thing about sitting through all those meetings was that regardless of a person's race, color, creed, or background, they all were very similar in some respects, particularly in the area of what they expected from their financial advisor.
As a general rule, one of the most common complaints I heard from clients (particularly assigned ones) was that they were promised the moon and their advisor (or former advisor, which was many times the case) failed to deliver.
Not only was this a prevalent complaint with our internally assigned clients, but on the whole the most common reason we obtained clients from other financial services firms was the same: they were told one thing and then received another.
Perhaps more interesting about this phenomenon is that the scale of the promise didn't matter: I met with clients who were equally upset about not receiving a promised phone call as they were that they had lost 10% in their accounts!
This is critically important for anyone entering the financial services industry to understand: even the small stuff (a phone call) is sufficient to ruin a promising relationship if clients are told a certain event will occur and then that event fails to happen.
It is understandable as a new advisor, under pressure to meet sales goals, to say whatever you believe your clients want to hear in order to make money. While this tactic can certainly pay some dividends in the short run, it almost certainly is a recipe for long term failure.
In this case, I am not referring to telling the truth, but rather ensuring you adequately describe your services and have an effective system of follow up so you don't accidentally forget important follow up items.
Lesson #1 for new financial advisors: be certain that you don't overpromise on the services you intend to offer. It is a far better to be reasonable and risk losing an initial sale than creating a serious problem down the road.
In our next article, we'll cover another golden rule for sales: Always tell the truth, no matter what.