Why It Matters:
  • Finding and retaining clients is an ever-evolving skill. There are new ways to build relationships.
  • Trust is important in a financial relationship. How do financial professionals earn it?
  • Beyond credentials, there are other things clients are looking for.

When it comes to earning trust with existing and prospective clients, financial professionals may be swimming upstream. After all, they’re working in an era when big banks have been accused of opening millions of fraudulent accounts or overbilling investors.

It’s an interesting dance: 48% of investors say they feel overwhelmed by their available investment choices, while 61% wish they had reliable guidance, according to a Scottrade Retirement Study.

A Harris Poll commissioned by online wealth management company Personal Capital reported, “Americans seem to be wary of financial services providers and unaware that financial advisors may not be working in their best interest.”

According to the study, nearly a third of Americans believe a financial professional is likely to take advantage of them. Financial scandals have left 70% of Americans question the trustworthiness of financial professionals, and 79% say they would no longer trust a financial institution caught up in a scandal.

Personal Capital added, “It’s no surprise that Americans are beginning to have their doubts about whom they can really trust with their finances.”


While some elements of building trust are fairly basic (don’t be dishonest), experienced professionals and academics continue to look for new ways to build trust and client relationships in the financial services world.

Listen. Really listen.

Michael Kitces, a rock star in financial services and a sought-after speaker on the conference circuit, has tips for young financial professionals to build credibility and trust. One in particular stands out for professionals at all levels: listen. “Clients won’t really trust you until they truly feel that they’re being heard and understood,” Kitces says. “Doing that well is a skill that takes time and effort to develop.”

In other words, just because you have ears doesn’t mean you know how to listen.

Takeaway: Kitces suggests taking classes to build active listening and empathy skills.

Websites matter

Former financial services executive Jack Waymire says financial professionals have an exceptionally difficult time building trust with potential clients online. He says 72% of financial professionals say their websites don’t bring in clients. That may be because they’re doing it wrong.

Waymire, who provides marketing services at Paladin Digital Marketing, says people don’t want to face high-pressure sales, don’t know how to pick the right person, and know the wrong financial professional can damage their financial future. If they search for assistance online, a financial services website has three minutes to convince shoppers the professionals are trustworthy.

To do that, Waymire advises you focus on transparency, expertise (education, experience, designations), ethics (“never had a complaint in 15 years”), and explain fees and expenses up front.

Takeaway: Look carefully at your website as a prospective client might. Is it straightforward? Does it answer questions a client may have in a clear, honest way? Would it encourage you to call you? 


Remember the John Houseman ads for Smith Barney? The wood paneling, the bowtie, the wise, older spokesman? That was at least 35 years ago.

Thomas Holly, U.S. Asset and Wealth Management leader at PwC, says as $30 trillion dollars (50% of all U.S. investable assets) change hands over the next several years from Baby Boomers to Gen X and Millennials, financial professionals need to move beyond the one-on-one office visit to digital platforms their new clients use.

That means a shift toward video conferencing, a team approach that can provide answers on-demand, and embracing social media. None of these innovations are meant to replace the one-on-one meetings, but they should supplement them and provide the service newer generations expect.

Takeaway: You’ve updated your computers and software and even your television many times over the years. It might be time to update your communication style. Ask clients how they want to communicate, so you’re working on their schedule, not yours.

Birds of a feather

When it comes to financial advice, it turns out people trust people who are like them. Trust and “social proximity” is the topic of a study by German academic researchers Oscar Anselm Stolper and Andreas Walter. The research is titled “Birds of a Feather: The Impact of Social Proximity on the Propensity to Follow Financial Advice.” Relying on 2,400 interviews, the duo found people trust others of similar age, gender, and social status as themselves. The researchers wrote, “We find that the intensity of social ties with the advisor is strongly positively associated with customers’ likelihood of following financial advice.”

Takeaway: It may be helpful to know that the trust you built easily with a client of the same sex, age, and social status may not be as easy to build with a client who doesn’t look like you. Knowledge is power, and now you know.


Does having a financial designation indicate trustworthiness? In a research paper produced for the American College of Financial Services, financial professional Jeffrey Camarda reported a correlation.

“Can consumers expect less misconduct from advisors who hold at least any one of the CFP®, ChFC®, or CFA® designations? After controlling for other factors, this study has found that the answer is yes,” Carmada wrote. “High-level financial planning/wealth management is probably as complicated a field as medicine or law, but the education and testing barriers for securities sales licenses and even for financial planning designations, in many ways fall short of this complexity.”

Takeaway: Carmada suggests that under something known as “signal theory,” earning a designation may serve as a “quality signal,” something a client may take as a proxy for quality.

Further reading

If you found this helpful, you may also be interested in Transamerica’s Field Guide to Effective Client Communication, including 16 phrases for financial professionals.

Things to Consider:
  • Clients have questions, want to be heard, and are seeking communication on their terms.
  • The internet makes it possible for clients to research financial pros all around them. Your website needs to be inviting and informative.
  • Clients have access to BrokerCheck at FINRA.org; you can make sure the information that’s available to them is accurate.


Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™, and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.