The crazy year that is nearing its end has left investors reeling and advisors in search of ways to build trust with clients, according to Aditi Javeri Gokhale, chief commercial officer and president of investment products and services at Northwestern Mutual.
Northwestern has turned those needs into a growing business, Gokhale said recently via email. Sales of the company's investment products and services have grown by 20% this year, accompanied by a 17% growth in cash flow. She remarked that financial advisors can grow their business by building trust with clients through compassionate planning.
“This tumultuous year has blurred lines between emotion and fact-based decisions," Gokhale said. "It is imperative that advisors build trust among clients while catering to both their emotional and financial needs in a compassionate and helpful way. When times are uncertain, people gravitate towards what they can trust to protect and lead them to financial stability.”
She noted that advisors can build trust by being an empathetic partner who understands their clients, and that showing their own personal values is critical to building that trust.
“Communication is the key to that relationship," Gokhale said. "It really comes down to partnering with clients, listening to them, and helping them find the right options to navigate this current environment. Advisors have to continually engage and take their emotions into account while helping clients pivot as their financial situation or priorities change."
She posits that advisors need to fully embrace virtual business models.
“We’re hearing from our advisors that the virtual environment has actually made it easier to connect with both clients and prospective clients more frequently," Gokhale said. "Plus, our advisors tell us they have been able to incorporate other important people into the discussion such as a client’s spouse, family members, attorney, accountant, and others.”
Advisors can use technology to meet clients’ heightened expectations and alleviate pressure by delivering an integrated approach that blends human connections and digital tools. "Even when clients are widely comfortable with face-to-face meetings again, 2020 has created a new level of expectations for clients and we have to continue to meet that demand," she said.
Beyond the use of tech, Gokhale added, advisors should embrace data and how to best leverage it to support strong client relationships. For example, having all of a client’s data in one place makes it easy to look at their full financial picture and identify trends.
“You can more readily understand what the client is experiencing and start to anticipate their needs even before they do," she said. "As a result, advisors can offer an even stronger financial planning experience that helps a client achieve their goals. In my view, firms that weren’t already implementing—and prioritizing—their digital capabilities to support advisor interactions are rapidly falling behind. As an industry, we need to invest in both people and tech, without either of them coming at the expense of the other.”