Trust in Advisors Rose Steeply in Past Decade: Cerulli

On a channel level, institutions with the highest incidence of dedicated advisor relationships boast robust client trust figures, from 75% for private banks to 65% for full-service advisory firms. In contrast, channels in which dedicated advisory relationships are the exception have a much lower trust level, including 54% for retirement plan providers.

“These results reinforce investors’ preference and increased satisfaction when they are able to develop and maintain ongoing relationships with advisors whom they believe understand their unique circumstances and preferences in pursuit of their goals, thereby earning heightened confidence in their loyalty,” Smith said.

Remedying Skepticism

Among the 40% of affluent respondents who are skeptical that their financial firms look out for their best interests, 24% are unsure of the quality of the products their advisor may recommend, compared with only 11% of those who trust their financial firms.

Cerulli noted that the advisor relationship can remedy the skepticism. Advisors have control over how much contact they have with their clients, and how they deliver financial information at the outset can be a key bridge to skeptical clients.

“Understanding the methods clients prefer — in-person or online — can serve as a conduit toward earning their trust,” Smith said. “Once that base level of trust is established, advisors can discuss product recommendations that are in keeping with clients’ financial plans.”

The study found that provider emails are the most frequent form of communication for investors, averaging nearly one per month, followed by physical mail with an average of at least seven pieces sent per year.

Skeptical investors reported that in-person meetings take place only semi-annually. A third said they do not want any in-person meetings, more than double the share of those who trust their provider.