Why Every Advisor Needs a Credibility Statement


Chris Gies
Senior Vice President of Advisor Education, Capital Group


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Key Takeaways

  • “Credibility statements” are much more powerful than “value propositions” when it comes to building trust.
  • It’s important to talk about your credentials, competence and character in a way that elevates your credibility.
  • A well-crafted credibility statement is short and highlights your qualifications, results and what you do for clients.

At one point or another, nearly every advisor has been told that they need to create a “value proposition” to define the types of clients they will work with and how they will serve them well. While articulating a value proposition can be a useful exercise from an internal planning perspective, it has limited value when it comes to building strong, deep client relationships.

Trust is at the heart of every successful client relationship, and a value proposition doesn’t begin to deliver on the need to create and build trust. Rather than focusing on how advisors articulate their product offerings and service differentiation, advisors need to define how they establish trust with their clients. That is why we believe “credibility statements” are significantly more impactful than value propositions.

As discussed in “Three C’s of Strong Client Relationships,” there are three core elements of building trust and developing strong relationships with clients: credibility, consistency and connection. Of these three, credibility is possibly the most critical element of building trust. Below, we’ll address how you can establish credibility with clients and prospects, and we’ll walk you through the process of developing a credibility statement.

Three Elements of Credibility

When a nurse cares for a patient or when a firefighter rushes into a burning building, these professionals garner the utmost credibility with the people they are helping. As a society, we know that nurses and firefighters have the training and experience necessary to do their jobs and have taken an oath to fulfill their job in service to others. But what does credibility look like when it comes to delivering financial advice?

Credibility is something that all successful advisors have built, but few understand where their credibility comes from. In working with thousands of advisors to help them grow their practices, we have found that credibility is a function of three primary elements: credentials, competence and character.

  • Credentials: CFP, CPA, CLU, ChFC, CFA — all of these are hard-won distinctions that require hours of dedicated study to attain. The certificates look nice hanging on your office wall or appended to your email signature, but what do they mean for your clients? Do your clients understand how your training actually helps them achieve their goals? Most likely not.
    According to a 2013 survey conducted by the Certified Financial Planner Board of Standards, 84% of Americans say that certifications are important when choosing their financial advisors. But simply listing your credentials isn’t enough. First of all, you need to explain what the initials mean and how they are earned. More importantly, you need to provide clients with specific examples of how your training prepared you to handle the challenges that your clients are facing. For example, if you are talking to a client who is approaching retirement, explain how your training taught you to develop strategies that can provide a solid income stream while managing risk.
    A quick note about including credentials in marketing materials: If you have earned a professional designation, be sure to check with your home office or compliance manual to determine whether it is approved for use and how it can be used.

  • Competence: Do you talk about your qualifications and track record in a way that connects with client goals? If you think that competence is mostly a function of your performance relative to a benchmark or a style box, then your efforts to convey your competence are missing the mark.
    Let’s face it, most clients or prospects aren’t going to walk into your office and say: “I need your help in building a portfolio that generates a risk-adjusted return that is along the efficient frontier for midcap growth stocks.” Yet, many financial advisors act as if the core value that they deliver is portfolio construction, rather than helping clients achieve their goals.
    The key to expressing your competence in a way that resonates with clients is describing your track record within the context of how it relates to helping clients reach their various objectives. For example, if a client is saving to pay for college for their three kids, share with them the number of parents who have put their children through college with your help and how you did it. Nothing demonstrates competence better than tangible, real-life examples.

  • Character: Do your clients understand your motivation for being a financial advisor? You may think that your motivation is self-evident to your clients, but you shouldn’t make this assumption. When talking with clients and prospects, be explicit in describing why you got into the business and in pointing out how your interests align with theirs.
    Remind clients that helping people like them meet their financial goals is the essence of your job and that any decisions and choices you make together are focused on that objective. Rather than talking about these concepts in the abstract, share real-life examples of how this alignment of intent has played out with other clients.

Formulating Your Credibility Statement

Your credentials, competence and character need to be communicated and reinforced throughout each client relationship. But it is especially important to convey these concepts at the outset of the relationship. That is why having a credibility statement that succinctly delivers these ideas is so helpful.

A well-crafted credibility statement is one to three sentences that describe your qualifications, what you do and your results. Your credibility statement should serve as your elevator pitch: it conveys what you stand for, what you deliver and what you promise in a succinct yet powerful package.

Here is an example of a credibility statement that we created:

For over 17 years, our team has proudly provided investment advice and has helped build and implement investment strategies for individuals, families and businesses in the greater Detroit area. Drawing on our team’s experience working in the accounting and management consulting industries, we have helped individuals and families work toward reaching their retirement, college and legacy planning goals.

Let’s examine the three parts of a credibility statement:

  • Your qualifications: Provide specifics about your experience level, the size of your team and the credentials that you bring. When discussing your professional experience, don’t feel like only jobs in financial services are relevant. For example, we work with one advisor who includes that he grew up and worked on a farm in his credibility statement because it clearly conveys a strong work ethic. Regardless of what jobs you’ve had, think about how you helped people solve problems in that role. Also, be sure to include the experience and credentials of your whole team.

  • What you do: List details about your capabilities and service standards, as well as how they are specifically designed to help your clients meet their goals. This is a good place to get specific about the types of clients you work with and even geographic areas and industries that you focus on.

  • Your results: Be sure to provide specific and accurate evidence of your track record delivering for clients who are similar to them. Be sure to list specialties, such as retirement planning, tax planning and estate planning, as well as other specific skills that you and your team may possess.

To help in building a credibility statement, we’ve created a useful guide, which you can download here.

Finally, developing a credibility statement should be a team undertaking. It not only has the obvious effect of ensuring that everyone on the team conveys the same message to a client, but it also helps to bring the team together to rally around a well-defined set of values and promises.

Taking Your Credibility From Good to Great

How will you know if you have done an outstanding job building credibility with clients and prospects? One way is to ask them how they would describe your expertise.

If you haven’t been intentional about following the steps outlined above but have done a generally good job of building credibility, there is a good chance that their response might be something along the lines of: “My advisor is knowledgeable about investing.” But if you have been focused on articulating your credentials, competence and character in ways that are relevant to your clients’ goals, their response might be something like: “My advisor has explained to me his commitment to staying at the leading edge of financial advice and how that helps me reach my goals.”

Clearly, taking a focused, deliberate approach to building credibility and developing a credibility statement can be among the most powerful decisions that you can make for the growth of your practice.

About the Author

Chris Gies is senior vice president of advisor education for Capital Group. He has more than three decades of industry experience and specializes in training high-level advisors on various practice development topics.

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