Understanding client behaviour core to building trust: BTNext
Over 1,000 financial advisers have attended BT Financial Group’s BTNext events across the country this week, as the events’ keynote speaker, behavioural psychologist and financial writer Morgan Housel, offered insights on better understanding clients’ behaviour to leverage outcomes.
Housel spoke of the importance of trust in building client relationships, saying that that was the quality that advisers’ value was really rooted in today.
He told the advisers in attendance that understanding their clients’ behaviour, especially in times of market downturn, was crucial to building such trust. The speaker recommended focusing on their behaviour, or how they thought they would behave, rather than how clients said they would feel in different market conditions.
“For any financial adviser, when they’re looking at clients’ behaviour they really want to pay attention to how they respond to market volatility, particularly on the downside,” Housel told Money Management before BTNext started this week.
“We have a lot of evidence that people’s past behaviour is a pretty good indicator of how they are likely to respond in the future.
“So I think that’s the biggest structural element of how you can actually manage your clients’ behaviour and expectations, rather than just asking them about their emotions and how they might feel.
“Then you can really focus on building your clients’ trust when the economy is strong, by talking through the history of market volatility and also your clients’ goals, so then when the tide comes out, they still trust you and they still stick around.”
Housel said that building such trust could benefit planners’ practices both through client retention and improved word-of-mouth recommendations.
The BTNext series of events kicked off in Brisbane at the beginning of the week, and had visited Melbourne, Sydney and Adelaide before concluding in Perth tonight.
AUTHOR
Hannah Wootton
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
