Advisors and insurance agents need to focus on building trust with consumers and clients in this environment, one in which the Occupy Wall Street movement dominates headlines, said Bob Baranoff, senior vice president of member benefits at LIMRA, during LIMRA’s annual conference today in New York.
“I do think trust in institutions has gone down,” Baranoff said. People are frustrated with big business, “and we’re not exempt.”
According to a LIMRA consumer confidence report, consumers said trusting a sales rep would make them 50 percent more likely to buy life insurance, Baranoff said. But consumers don’t trust Wall Street, he added, pointing to the Occupy Wall Street movement. Many advisors are seeking answers on how to craft their message in regards to the movement.
Sixty-four percent of those surveyed said agents and brokers were more interested in fees and commissions than what is right for them, according to LIMRA’s data. Only 10 percent said they had confidence in stock brokerage and investment firms, while 11 percent expressed confidence in agents and brokers, and 13 percent said they were confident in FAs.
Baranoff said trust consists of four main components: competence, benevolence, integrity and dependability, or being able to deliver on your promises. In fact, consumers listed honesty and integrity as the most critical attribute in deciding to use an FA at 80 percent. Competent advice was the next most important attribute at 64 percent, followed by knowledge and expertise at 61 percent and dependability at 57 percent.
To gain trust, advisors should use behavioral techniques with consumers, rather than traditional methods, Baranoff added. In fact, the survey found that consumers are 29 percent more likely to buy from an advisor who uses these behavior techniques.
Tell stories and use experiences, he recommends. “Make it real, rather than just numbers and analytics.” Don’t use too much detail or you’ll put them to sleep. Give prospects “rules of thumb;” help them visualize the benefits; and make them part of the process. Also, make sure you take their preferences into account. For example, he recommends advisors ask questions and get to know the prospect. Personalize presentations for them, and offer them at least three options.