For a lot of people, it’d be easier to borrow $100,000 than it would be to get advice on whether you should borrow $100,000. In 2019, there are very few services that are like financial advice. Advice requires more significant time and effort upfront, with a long delay before the full value of the advice process is delivered. This gap, between effort and value, is what I call the Trust Canyon and it is a valuable source for innovative ideas.
Investment by the client (financial, effort, and emotional) all requires trust. Trust that this will meet their expectations, trust that promises will be delivered on, and trust that the outcome will be valuable to them.
Due to the complexity of advice and its regulation, we struggle to have candid conversations with a client for fear of it being deemed unwritten advice. As a result, value in the classic advice process is very delayed.
The gap between these, the effort required and the value delivered, is the Trust Canyon. Mapping the Trust Canyon to your advice process is a useful method for identifying opportunities for innovation as it brings focus on reducing the time and effort required before value is delivered.
Anyone who has had to tell a client an SoA is going to take more than two weeks has felt the Trust Canyon. If you’ve ever had to say it’s more than four, you absolutely know what I’m talking about. You may be able to get the relationship to cross that bridge, but it takes more trust than it should.
In this article we’ll be covering:
- The Trust Canyon in detail
- How to narrow the Trust Canyon
- Some simple examples you can consider
What is the Trust Canyon?
Let’s take a quick look at a typical advice process, from a client perspective with one key difference. Let’s separate out the effort required against the value delivered.
Becoming a financial advice client can be have some pretty awful aspects when examined in isolation.
- I have to engage someone, who may be good, but may flog me something I don’t want.
- I need to spend time in meetings I’d rather not be at.
- Once I start that process, I find myself needing to share intimate secrets that I am embarrassed by (credit card debt, spending habits, actual weight).
- At various points, I’m asked to complete lengthy forms, dig up all kinds of documentation/details, and sign forms authorising the adviser to ask even more questions from my financial product providers.
- I may have to commit to a fee to prepare a document I never asked for.
- My investment is rewarded by being asked to wait weeks for this document I never wanted and which nobody can tell me the exact contents of.
- I must then choose between reading a long document that looks worse than watching ‘The Time Traveller’s Wife’, or just signing something saying I’ve read it so I can get to the value I’m hoping will eventually come.
- Then, more forms, more waiting before things start falling into place.
Whilst many of my readers will have a process that’s easier than this at several points, I imagine very few (if any) have a process that you could consider painless.
OK, let’s look at the value delivered by the advice process:
- An initial meeting, which may include some insights into finance and even personal insights.
- Subsequent meetings, which may include educational value, some insights into my financial future, and rough options available to me.
- A Statement of Advice which comes some weeks later. Depending on the situation, this may be of little/no value, or (if written and delivered well) may provide a valuable plan to significantly improve my situation.
- Execution, which once delivered provides immense value compared to my starting point.
Don’t get into the trap of valuing your time here. Your time is of course valuable, but it’s not valuable to your prospective clients. To them, their time is valuable, not yours. Only ,think of value in terms of what you deliver to them, which has nothing to do with how many man-hours went into the process.
Plotting client effort vs value delivered over time
So, let’s plot this out. For the below you can see:
- x axis represents time.
- y axis on the blue line represents a % of client effort over the journey.
- y axis on the orange line represents % of value delivered.
The gap between these two lines is the Trust Canyon. The gap we must bridge by building trust. The bigger the gap, the bigger the bridge required to cross the Trust Canyon.
It’s not hard to see the visual representation of the amount of trust you require from a client to get them through an advice journey. If you aren’t providing significant value prior to the SoA, it’s a lot of trust.
Narrowing your Trust Canyon
This is something you can try at home and it’s not an exact science. Reflect on your process and be honest with yourself. How much value does the client really receive at each step prior to implementation? How much effort do you require of them? Map out what you think your Trust Canyon looks like on a whiteboard.
Once you have done so, you can reflect on your process and look for ways to narrow it and as yourself?
- What value can we increase or bring forward?
- What effort can we reduce or push back?
- Where we compress the process to make it faster?
Examples of narrowing the Trust Canyon
To illustrate some ideas that can stem from this process:
- Pushing back effort – Find ways to stagger the fact-finding process so that it’s not so painful up front
- Reducing effort – Give clients opportunities to self-serve outside of meetings. It’s not for everybody, but at the very least provide the option.
- Bringing forward value – Subject to compliance limitations, providing resources or insights prior to the SoA helps repay the clients for their effort sooner.
- Bringing forward value – Providing scoped advice where you can ASAP, with remaining unrelated areas to be covered later. This could be well worth the cost of an additional SoA if it means some value is delivered quickly.
The above can require working with your Compliance team and some creative thinking (read my blog on Doing the Gemba Advice Walk to spot time sinks in your client process).
Through my work consulting on the advice process, I target solutions that achieve the win-win-win of efficiency, risk management and client experience. I regularly draw upon the Trust Canyon to try and identify opportunities for innovation across all three.
If that’s something you might like help with, book a Virtual Coffee with me or drop me a line here. Otherwise, I’m keen to take questions or hear your thoughts in the comments below.