Rebuilding the trust and confidence of consumers post Royal Commission can be an opportunity for financial planning businessess to clarify what's important to them and their clients. Trust is a commodity that companies covet. Gone are the days of blind confidence and loyalty in a company based solely on brand familiarity or baseless claims of superiority.
As Australians follow the global trust deficit trend, financial services organisations must look to improve confidence and trust through actions, not words alone.
The Financial Services Royal Commission has shone a light on the trust chasm between consumers and financial services; a relationship perceived as one based on power rather than affinity, obligation not trust, and necessity rather than want.
But it is not just within the financial sector that organisations must work to fundamentally change perceptions. Consumers are looking to brands and services to make a meaningful difference in their lives and society.
What is the state of trust and why is it important?
The trust deficit, also known as the trust crisis or the mistrust contagion, has reached epidemic proportions across the globe. This deficit in consumers varies from granular to macro levels. In a Trump-fuelled era, many consumers conclude they can’t believe what the media and big businesses are feeding them. While at the local level, we can’t even trust that the honey we’re buying at the supermarket is genuine.
The Financial Services Royal Commission has been a catalyst for change, as people are demanding more transparency in all financial interactions. Similar events are being called for across aged care, energy and the media.
Sceptical consumers are on alert, applying doubt to every interaction. However, this provides an opportunity for companies to clarify what’s important to them and their customers.
Trust in strangers
Ironically, a countertrend has emerged. We are sharing with strangers who we don’t even know.
We share our houses with strangers on Airbnb, get into cars with unlicensed drivers who are strangers with Uber, we are lending and borrowing from strangers on RateSetter and LendingClub, and hiring strangers to hang paintings, bartend our parties or pick up our supermarket shopping on Airtasker.
We are sharing our bikes on Spinlister, our cars on Car Next Door, our gardens on Landshare, our pets on BorrowMyPooch and even our toilets on Looie.
Innovation in customer care can improve trust
So, how should we respond as financial planners to these ironically opposing cultural trends?
Companies willing to innovate and cultivate customer relationships built on openness, compassion, solidarity and fairness, will come out in front of the trust deficit.
This can be done by bringing people into the fold, rather than keeping them at arm’s length. Many people are easily overwhelmed and confused by finances and advice. Acting to develop customer expertise through value-adds, like educational tools and master-classes, can help empower their decision-making and reflect on the integrity of your brand.
Try before they buy
We can also learn lessons from online. Streaming services like Netflix and Spotify offer a variety of low commitment, sometimes free, pay-by-the-month services.
The barriers to becoming a customer are low, which means there is less trust to be lost by that customer. Consider what low-cost, low barrier services you can add to your value proposition, such as scaled advice, webinars, seminars or even podcasts, to help build trust – letting prospects ‘try before they buy’.
Your digital reputation also matters
It is important to recognise the considerable time building trust through one-on-one relationships with referrals and your clients. Yet, we often think this is not enough, and extend this to online and by enhancing our digital reputation.
Today, your digital reputation is made up of all your digital touchpoints, including your website, social media profile and client portal.
According to the 2019 Netwealth AdviceTech Report, one in three advice firms post to social media at least weekly and 41 per cent update their website or blog at least monthly.
A website is important to keep fresh, as it is often the first time a prospect interacts with you – and we all know first impressions count when building trust. And social media can be a way to establish trust through via an ongoing dialogue of well-crafted posts and information.
In a digital world, think about how annoying it is trying to browse a website from your phone that is not optimised for mobile?
Trust and user experience are linked, so it’s important that your business consider this when developing all your client touchpoints.
Building a confident future
Trust isn’t lost to society, but how it is earned has changed.
The trust deficit creates an opportunity for financial planners to focus on maintaining confidence through relationships and an enhanced digital identity. The time is ripe for transformative leadership in the industry.
Disclaimer: This article has been prepared by Netwealth Investments Limited (Netwealth), ABN 85 090 569 109, AFSL 230975 and is of a general nature. Any person considering a financial product from Netwealth should obtain the relevant disclosure document at www.netwealth.com.au.