By Sharon Moller, Financial Planning Coach at Old Mutual Wealth and Ferdi Booysen, Head of Client Solutions at Old Mutual Wealth
The Covid-19 pandemic has heightened the need for authentic human connections, underpinned by transparency and trust. The value of financial advice cannot be understated in a time of uncertainty where clients need relevant, clear advice that is designed to help them stay the course and make the best decisions for their financial well-being.
Yet the growing trust deficit, as seen around the world between citizens, governments and big business on issues related to managing the pandemic’s impact, risks undermining these efforts. This lack of trust has a far more profound impact on our society, resulting in real adverse socio-economic outcomes for all stakeholders in the long run.
We have a shared responsibility towards South Africa and the clients we serve. Narrowing this deficit is paramount, and the FSCA’s Market Conduct Principles — if embodied by all players in the industry — provide sound behavioural standards designed to encourage and nurture trust.
Unless we understand that clients should be front and centre of everything, in our view, we are in the wrong profession. In many ways, the global pandemic has reinforced the importance of these Market Conduct principles, including our focus on our clients’ needs and accelerating our digital transformation.
Designing digital solutions that empower financial advisors to interact and reach clients — especially during crises — not only works towards building trust but also equips clients to make healthy financial decisions.
During the pandemic, we learnt that going virtual enables advisors to interact in a meaningful way with clients when they need it most. An evolving digital toolkit enabled business as usual. Even in very unusual circumstances, it equipped financial planners and advisors to communicate effectively and timeously.
Keeping pace with this rapidly evolving world where clients interface with their devices goes a long way towards maintaining relevance and building credibility for the industry. However, beyond tech, financial insight and expertise, however specialised, is the human experience.
A human crisis, like the one created by the pandemic, is an opportunity to build trust. In our view, a holistic financial planning process starts and ends by showing empathy. Considered humanities oldest leadership trait, empathy is the capacity to understand or feel what another person is experiencing.
It is also an essential aspect of customer-centricity. It’s key to understanding the context of a client, identifying drivers that are limiting or destructive to healthy financial habits, and developing advice that makes a real, lasting positive impact on the client’s financial well-being.
For example, one of the tools we share with financial planners to cultivate empathy is active listening. As opposed to actively “offering financial expertise”, active listening allows the financial planner to pick up on the client’s emotional attitudes and behavioural patterns.
In times of crisis, it’s important to remember that most of our decisions are based on fear and scarcity. When a financial planner applies active listening skills, they show empathy, which helps to build a connection. And because the conversation is fundamentally respectful, in turn, you earn their trust.
Rather than passively hearing (while waiting for your gap to speak), active listening is about being fully present in the moment and being consciously open to what your client has to say.
This is the embodiment of the Market Conduct Principles — an approach to customer-centricity that should be present at all levels in our industry. Putting our clients and their needs first is pivotal not just from a compliance perspective but because it ensures clients get the trustworthy advice they deserve.
And, as Covid-19 has so cruelly shown, as sure as night follows day, there will be good times, and there will be bad times. However, if service providers innovate and evolve their support for financial advisors in the spirit of the Market Conduct principles, and if we all listen more attentively, we are better positioned to face anything the future brings with confidence, knowing that we have built on a sure foundation of trust.