Avelo Voice - Financial Services Blog

A Matter of Trust

It is a sad fact that consumers often trust friends or family above a financial adviser.

Perhaps the media’s frenzied reporting on each and every bank bailout, bonus negotiation or mis-selling scandal has fuelled this distrust but is there more to it than this? Should we as an industry be accepting our share of responsibility and making changes to address the situation?

Those consumers who have relationships with advisers invariably trust and value them.  The challenge is to find a way to spread this positive message and engage with the disillusioned consumer.

So where is the problem looming largest? I believe it is in the dis-engaged mass market - the ‘squeezed middle’ earners - who probably seek advice just a few times in their lives, at key milestones like buying a house, starting a family or planning for their retirement.

Undoubtedly post-RDR, delivering financial services to this segment of society is going to get much harder (the squeezed middle could forfeit access to financial services altogether) and yet it must be remembered that a number of these people are future high net worth customers who should be nurtured and developed.

Put simply, the mass market are unlikely to want to pay the required fee to cover a full QCF 4 level face-to-face advice service – nor do they have any real understanding of what this entails or corresponding appreciation of its value.

What is clear is that Intermediaries and financial services companies who want to access the middle market have to move with the times.  The new generation of internet savvy, middle market customers expect to have ready access to transparent, simple and trustworthy support, education and information.

They are competent ‘prosumers’ – that is, they are happy to do things themselves and learn from their mistakes, with the internet perceived by many as a trusted source, working on the consumers’ behalf.  This presents something of a challenge for advisers who will need to demonstrate their value more than ever. Essentially, the adviser must engage with the consumer on their terms or risk losing them for good.

New technology – especially the proliferation of apps, and tablets is not only driving this change in consumer expectation but will also support the adviser in meeting this demand.  The sophistication of technology and the tools available should enable advisers to connect with and serve customers that previously would have been deemed uninterested and unprofitable.

Transparency and openness should be our watchwords – an informed customer will also be a loyal customer.

The bottom line is that the adviser needs to embrace new world technology to reach out to the new world consumer as this is where the future of our industry lies. What is your business doing to serve this market in the post RDR world?