- On October 2, 2017
An online video experiment with over 1,000 Australian “potential clients” viewed actors giving financial advice. While this wasn’t an American consumer experiment and it was through online video instead of in person meetings, the findings are worth consideration.
- The results confirmed that “first impressions” matter and influence potential client decisions to follow an advisor.
- The research found that potential client rankings of an advisor’s trustworthiness, competency and professionalism could be manipulated by how he or she gave advice.
- “The results demonstrate how consumers can be easily manipulated by the way advice is delivered,” says Susan Thorp at the University of Sydney’s Business School.
- The experiment showed the formula for advisors making a positive first impression was to begin with good advice on an easy topic that the potential client understood. If this is done first, the clients rated these advisors as more competent and continued to trust the advisor even if they received bad advice later.
- The advisors who started with the good basic advice was rated as more competent.
- Displaying a [financial designation] qualification made people more willing to follow advice than they otherwise would be.
- Advisors with credentials were more likely to be chosen as giving good advice and rated as more trustworthy, competent, professional and persuasive than their opposing non-credentialed advisors.
- However, just like in America, potential clients had difficulty distinguishing real credentials from concocted ones.
Advisors starting with good advice on basic investments that clients understand, and then advancing from there, aren’t “manipulating clients” from our perspective. It’s a sound and commonsense approach. The experiment does reveal however how your approach to giving financial advice to a new client makes a difference.
The simple conclusion? With first client meetings, keep it simple first, and then advance from there.
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