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How to build investor trust: 7 tips for investment advisors

RingCentral for financial services


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As an investment management professional, you need to foster trust with your clients. What makes them trust you?

  • Showing them you understand their needs based on their preferences
  • Using the right mode of communication for the right content
  • Responding quickly to shifts in the market or when crises arise

In this article, we’ll explore the steps you can take to increase investors’ trust in your advisory by:

  • Sending the right communications to the right client at the right time
  • Using the best mode of communication for the content
  • Learning how to deal with the surge in client requests in the wake of a disaster
  • Using a unified communications platform to build a solid relationship based on trust

Unified communications for investment advisors
Investment advisors are protecting their greatest asset with unified communications

How do investors feel about their investment advisory firms?

The events of 2020 led to highly volatile markets. It was a difficult time to be an investor, and uncertainty continues. How can investment advisory firms maintain their client base during this challenging time?

The answer lies in their ability to create a trusted relationship with investors. Research from the Spectrem Group revealed that 29% of investors choose an investment advisor because that person is honest and trustworthy. In comparison, only 18% of investors choose an investment advisor because of that person’s track record.

The Spectrem Group’s research also showed that 83% of investors trust their advisors because they look out for their clients’ best interests, while 61% believe their advisors are proactive about communicating with them.

It is no longer enough to offer investors a one-size-fits-all communication channel. Today’s investors expect and deserve more. Meeting those expectations requires an investment advisory to put thought and effort into an inclusive communications strategy. It is, by no means, a simple task, but it is well worth the effort to learn which channels investors prefer at a granular level.

For example, different age cohorts have their own communication preferences. Millennials (born between the early 1980s and the mid-1990s) represent a 30 million-strong bloc of investors. Sixty-three percent of Millennial investors want a mobile platform that connects directly to investment management professionals, according to Accenture research. Analysts at Broadridge add that just over 15% of Millennials want to communicate with their investment advisory over the phone; in contrast, just under 40% of Baby Boomers prefer phone conversations with advisors. If investors don’t understand their clients’ communication preferences, they could lose them—analysts estimate that anywhere from 65-95% of clients’ children fire their parents’ advisors after inheriting their money because the advisor doesn’t build a relationship with them.

What steps can investment advisory firms take to build client trust?

With those statistics in mind, let’s look at some key steps investment advisory firms can take to build client trust:

  • Be proactive about communicating
  • Choose the right solution to help you communicate
  • Communicate with investors through their preferred channel
  • Make it easy for investors to reach out to you through their preferred channel
  • Respond in a timely fashion to investor queries
  • Share your knowledge and expertise
  • Reach out to show you care

Be proactive about communicating

Proactive communication is one of the cornerstones of building trust with investors. If there’s an issue with their portfolio, they don’t want to wait to find out about it; they want to know now.

We’ll illustrate with two examples: the 2008 global financial shutdown and the public health crisis that unfolded in 2020. In 2008, investment management professionals learned that to maintain their clients’ trust, they had to be proactive about communication. They could not remain silent in the face of economic collapse, or they would lose clients forever.

As the public health crisis spread across the world in 2020, investors turned to their advisors in record numbers. Between February and March of that year, the demand for advisor communication jumped 47%.

However, to communicate proactively (and to simplify proactive communication), you need the right technology in place.

Choose the right solution to help you communicate

The right solution to facilitate easy, effective communication between you and investors is a unified communications platform.

Unified communications is software that incorporates these capabilities:

  • Messaging (through text as well as chatbots)
  • Voice calling
  • Video calling
  • Videoconferencing
  • File sharing
  • Fax
  • Presence indicator

All of these capabilities are integrated into a single platform. With a unified communications platform, you save time and money because you don’t have to use several point systems to share information with others. Moreover, unified communications simplify external communications, so it’s easy to proactively communicate with clients.

RingCentral for Trusted Advisors
Transform your investment advisory business with secure cloud communications

Communicate with investors through their preferred channel

The global health crisis of 2020 changed the way clients communicate with investment management professionals; moreover, it shifted investors’ preferred communication channels:

  • 58% used phone calls for the first time
  • 46% used emails
  • 36% used video chat (and 9% prefer this channel over all others, with Millennials being the most likely to use this channel)

What’s more important to know is that 62% of investors would either fully or partially maintain these new communication channels going forward.

Investors have very specific thoughts about how investment management professionals should communicate with them. While email is a perennial favorite, other channels are rapidly gaining ground:

  • 29% prefer text messages
  • 26% prefer newsletters
  • 26% prefer face-to-face sessions

RingCentral for financial services

A unified communications platform supports a variety of channels (email, text messages, and video conferences), enabling you to communicate with investors the way they want. This is a crucial capability, as it gives investment advisory firms the flexibility they need to communicate the right message at the right time.

For example, in an urgent situation, text messaging gets out information quickly to your whole client base. Video chats or phone calls enable advisors to gauge client interest, while chatbots help investors clarify their goals at the outset.

Make it easy for investors to reach you through their preferred channel

Investment management professionals realize that when they don’t listen to clients, and they don’t take their preferences into account, clients leave. In a June 2020 survey from Natixis Investment Managers, over two-thirds of advisors said that failing to communicate in the way the client expected would make a client leave the firm. Sixty-four percent of advisors believed that not listening to clients would lead to their loss.

A unified communications platform helps you communicate with your clients through their preferred channel—through phone, video calls, or text message, you are building and reinforcing a bridge to better communication and, ultimately, more trust.

Respond in a timely fashion to investor queries

In an interview published in January 2021, fiduciary investment advisor Billy Lanter remarked, “A phone call or an email that goes unreturned can do significant damage.” Investors trust you with their assets, and they want to know that if they have a question, you’ll respond to it quickly. Otherwise, you’ll lose their confidence.

With a unified communications platform, responding in a timely fashion to investor queries is simple. Unified communications platforms work on mobile devices as well as desktops, so no matter where you are, you can answer an investor’s question. For example, if you’re on the phone with another client, you can message someone to let them know you’ll get back to them. You can also set up routing options, so investors can be directed to someone who can help them immediately.

Similarly, when call volumes surge in response to market fluctuations, unified communications platforms enable investment advisors to prioritize incoming calls from special clients, determine incoming priorities, and self-administer call options appropriately.

Share your knowledge and expertise

Research from the investment advisory Vanguard shows that clients want their investment advisors to educate them about the markets so they make the right decisions. One way to do this is to share your knowledge and expertise through articles, presentations, and webinars.

A unified communications platform makes it fast and easy to share information with investors. Messages enable you to notify them about recently published articles, and video conferencing capabilities allow them to join informative webinars.

Reach out to show you care

Another way to build trust is to reach out to investors to show them you care about what’s going on in their lives. In an interview with US News & World Report, financial advisor ShirleyAnn Robertson explained that she hosts seasonal events for clients. These events show clients that they’re more than just a number to financial advisors.

After the event, Robertson noted that she follows up with clients to ask if they have any concerns or requests. With a unified communications platform, you can coordinate and even automate messaging to clients via their preferred channel.

Unified communications platforms allow you to hold virtual meetings with clients. You can meet one-on-one as well as hold educational seminars, all from within the same software. A unified communications platform enables you to provide a personal touch, even if you can’t meet in person.

RingCentral’s unified communications platform helps build investor trust through better communications

RingCentral’s robust, feature-rich unified communications platform helps investment advisories build trust with their clients by enabling effective, simple communication. To learn more, get a demo.

Originally published May 05, 2021, updated Dec 30, 2022

Work together from anywhere with messaging, video conferencing, and phone calls—all in a single platform.

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