RIAs: Building Trust with Clients

Trust is an advisors most valuable asset to their firm. It builds the foundation of business & growth between clients and advisors. A Financial Customer Experience Report found that almost half (47%) of wealth advisory clients chose “Trust” as to why they originally selected their advisor and 42% chose “Track Record”. However, the same report also noted that “trust” & “track record” were also the two biggest letdown factors and reasons for clients leaving. Which means building trust can be easy, but maintaining trust, not so much.  

So, what exactly does trust mean for a wealth advisory client? In a nutshell it means they trust their advisor to take all their financial data & information to make the best investment decisions for their future. Out of the nutshell, financial clients want transparency, respect, accessibility, and of course, return on investment. As an RIA, if you can provide these core services, you can gain trust. But how can that trust be maintained? The financial data & information collected from clients is extremely sensitive & valuable. Far more valuable than most people realize. Which is why for registered advisors, the treatment of said data is regulated by the SEC. The SEC says advisors must safeguard all client Non-public Personal Information (NPI) through various protocols and procedures, with one key theme: Data Privacy. The protection & privacy of data is the golden ticket to maintaining trust & relations with clients. A study from the International Data Corporation (IDC) found that 78% of clients would leave their current advisor if they ever experienced an information security data breach, regardless of the size of the firm or breach itself. 

“It’s not until clients feel they’ve been treated unfairly, that they leave.” 


There are two methods every RIA should adopt in order to nullify the risk of churn percentage due to data breaches. The first is creating a Human Firewall. The greatest risk to RIA information security is the staff. The technologies being utilized by todays advisors to create financial portfolios & automate processes are so sophisticated & complex it makes it difficult to really understand how much is truly going on within the network. Financial employee lack of cyber awareness is the biggest exploit for cybercriminals today. Whether its misuse of a device, weak passwords, phishing emails, or using unsecure networks, financial advisors pose the largest threat to any firm. Creating a Human Firewall means to completely shift the culture within the organization to a more secure stance. A human firewall means every employee with a device understands their responsibility for data under their protection and practices information security.  

The second method to maintaining client trust is to prepare for the worst and hope for the best. Always always always, assume your company is going to experience a breach. Let’s face it, advisors deal with a lot of personal data and A LOT of money. That information is always going to be targeted by bad actors. The FBI once said, “It’s not a matter of if, but, when” regarding an information security incident. Incident Response plans not only helps firms eliminate the fear of a breach, but also allows them to stay ahead of GDPR regulations. A Lexology study found that less than 25% of financial organizations have an information security breach response plan and more than half of them don’t test the plan they do have. Without an Incident Response plan, it is impossible to be fully compliant with GDPR. If you are prepared for the worst, then anything less than that is manageable, and you already have a process in place to mitigate the outcome. 

Financial firms can increase client trust 30% by putting forward an information security first approach. Proactively responding to information security threats, and the collection of your employee’s activities with client sensitive data is required to comply with FFIEC, SEC, OCIE, and/or FINRA. Advisors are the first line of defense for a breach. A Human Firewall approach can reduce the risk of social engineered threats by 70%.  

Investing in your organization’s security is an investment into your clients’ trust. Here, at Steel Patriot Partners we help your company gain the trust of your clients they deserve. We provide financial firms with the necessary tools to secure client data in any form from anywhere. We utilize DoD information security frameworks to. Help you stay compliant with state and federal regulations.  For more information on how you can gain the trust of your clients by keeping their data private & secure simply give us a follow on social media (FacebookTwitterLinkedIn), send us an email, give us a call at 703-297-4405 or contact us directly! Regardless of the method you choose, we look forward to hearing from you and – as always, we appreciate your time for reading our content! 

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