The Power of Social Proofing

In this week’s newsletter, I interviewed Robert Morse, who wrote to me some weeks ago about my article on Inheritance Tax. I was intrigued by his profile that he is a Partner with The Private Office responsible for the Family Office division, and they had won numerous awards, such as the Chartered Financial Planning Firm of the Year 2023 by their professional body, the PFS, as well as within the top 25 Financial Times top 100 financial advisers.

As an award winner, I was keen to interview Robert for our ‘How To Keep Your Money’ series to explore why The Private Office had been so successful and whether it had used some or all of the techniques I set out in my CPCP training program which are based on solid psychological techniques and research.

I was delighted to discover that it used most of the techniques I described in my training program to good effect while avoiding many common pitfalls that put people off.

The first thing to recognise is that most private clients go to a professional for advice, whether in managing their investments, planning their taxes, or sorting out their succession because they need assistance. This means that they cannot evaluate the quality of the service from their knowledge or experience. They need to use other means - such as the office's location, the professional team's look and manner and what psychologists call ‘social proofing’, which is what other people have said about the organisation.

Winning an award, especially from the industry's regulatory body, is excellent ‘social proofing’. Essentially, it is an endorsement by the professional body that regulates the industry that they are the best - or at least one of the best. The Private Office has won the Chartered Financial Planning Firm of the Year 2024.

Another form of social proofing which The Private Office draws upon heavily on its website is satisfied client quotes. The story of Daniel Blandford is particularly interesting because it gives a 5-star rating - more social proofing with a story as to why he sought advice. From my research, Case Studies are 1,227% more likely to be remembered than facts and statements without human content.

This is a big trap most professional advisers fall into, wasting time and space giving facts and figures about the organisation, which triggers resistance rather than a positive response. One technique they could add is a quote on how seeking advice from The Private Office made the client feel, such as ‘I felt in safe hands with advisors best suited to what I needed’.

Professional accreditations is another powerful form of social proofing. The Private Office is entitled the Pension Transfer Gold Standard, Society of Trusts and Estates Practitioners, Chartered Insurance Institute and Chartered Financial Planners. All these bodies provide training and, once mastered successfully, give the private client professional letters after their name to showcase their expertise. Another excellent form of social proofing, which we want to emulate with our CPCP program, with the accompanying CPCP accreditation.

The Private Office also harnesses the power of reciprocation. This is the need for most people to do something in return for a gift. The Private Office provides the first scoping meeting for FREE. This is a very powerful and useful tool and also begins the journey towards building trust between the adviser and client.

Another example of how The Private Office builds trust is by winning an award for Top 50 large companies. Again, private clients looking for an adviser will be reassured by a firm that has won an award for being a good workplace. If it is recognised as being good to its staff, then it is likely to show the same respect and concern for its clients.

It also draws on education, it notes that only 6% of independent financial planners are Chartered which is another example of social proofing.

Another powerful technique is aggregation. The Family Office team, of which Robert Morse is a member, makes it clear that if they do not have the relevant skills and expertise in-house, they will make an introduction to someone who is, whether a tax planner, accountant or a lawyer. The power of aggregation can be seen everywhere and is very strong. Paul Hewitt of the Society of London Art Dealers, whom I interviewed a few weeks ago, said in my podcast with him that 50% of art sales are done through art fairs where gallery owners set up stalls next to other galleries and prospective buyers can come and go as they please with no pressure to buy unless they want to. Many professionals think they want to be the only service provider, but psychological research makes it clear that a service provider is more likely to be noticed if promoting their services alongside their competitors.

Lastly, The Private Office is upfront and transparent about its fees. This is another way to build trust by not ducking the nasty bits.

As measured against the psychological techniques outlined in my CPCP training program, The Private Office scores highly, and it shows in its awards, satisfied customers feedback and growth - well done.

A FREE preview of the training program can be found here, together with other benefits of membership, which include discount codes for members.