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  • Writer's pictureYoram Solomon, PhD

The Trust Premium™ for Financial Advisors is 41%

Updated: Oct 19, 2023

I just received the results of the first sample of my new ground-breaking study of the Trust Premium™ that customers are willing to pay a salesperson or any other service provider or professional when they trust them more than their competitors. The first sample asked about financial advisors. In short, the participants indicated that when the financial advisor fees are equal, they are 95% more likely to choose the one they trust. Furthermore, they were willing to pay 41% higher fees to a financial advisor they trust (even though they had never worked with them before) over one they trust less.

The Model

I took the first shot at estimating the Trust Premium a few years ago. I chose a $10,000 home renovation project and found that the survey participants were willing to pay a 29.6% premium when they contracted a contractor they trusted over the average one. However, I realized that there were several factors affecting that premium. Those included personal context (for example, different people have different levels of trustfulness, or willingness to trust in general, regardless of the contractor’s trustworthiness), industry context (some industries would have lower premiums while others would have higher ones), the severity of the consequences of choosing the wrong professional, demographics, and mode. As a result, I developed the following model, which guided the current research:

The Methodology

After contacting and researching several research panel companies, I selected Centiment for this study. I developed a survey with 86 questions (taking every research class available during my Ph.D. program came in useful), which I refined in a pilot study with several participants. We had 223 participants willing to take the survey, of which 100 qualified (based on their intent to hire financial advisors and demographic diversity). The survey had several sections:

  • Qualification (1 question)

  • Demographics (9q)

  • Financial advisor trustworthiness according to my relative trust model (32q)

  • Trust transferability (5q)

  • Financial advisor context (4q)

  • Trust Premium (5q)

  • Willingness to recommend the financial advisor (3q)

  • Personal context (8q)

  • Personal trustfulness (8q)

  • Industry context (7q)

  • Consequences of making the wrong decision (6q)

I applied guardrails in the survey to catch responses that were not credible (for example, answering all questions with the same answer). The error margin of the 100-participant sample with a 95% confidence level was approximately 10%. That number will improve as I continue to collect data from additional samples.

The Trust Premium

In the Trust Premium section, I described a trusted financial advisor (A) compared to an average one (B) (I avoided comparing to a financial advisor with distrusted qualities). I then asked which financial advisor would the participant choose under the following circumstances:

Several insights to note from this table:

  • When the fees are the same, 90% would choose the trusted advisor (A), and 10% were unsure, of which I considered half would still consider A, to a total of 95%.

  • The average willingness to pay a higher fee to the trusted financial advisor (A) charged was 41%.

  • Even when A charged 100% higher fees, there were still 22% willing to choose them, which indicated the potential for the Trust Premium to be even higher than 100%.

  • While 22% were willing to pay a 100% premium to the trusted one, 8% would choose the cheaper one even if the premium was only 10%. This indicates that target customers could be further segmented to identify those willing to pay higher premiums. The characteristics and context are available to me within this study, and I will conduct such segmentation and update this article.

It seems that the customer preferences would follow the following behavior:

Additional Anecdotal Insights

Here are a few insights I picked up before I conduct further analysis and correlation to the Trust Premium:

  • The two most important financial advisor trustworthiness qualities were using no BS (3.92/5) and caring about me (3.93/5).

  • Participants tend to trust people until they betray them (5.03/7) more than not trust people until they earn their trust (4.41/7).

  • 61% of participants slightly, generally, or strongly agree with the statement “You get what you paid for.”

  • Slightly more people (51%) slightly, generally, or strongly trust financial advisors than people in general (45%).

What Does that Mean for Financial Advisors?

I didn’t embark on this research without an end goal in mind: to help salespeople, service providers, and other professionals achieve the highest Trust Premium they can in their industry. The research is only the first step. The entire process is:

  • Conduct a survey to assess the Trust Premium™ in your industry and the factors that affect it.

  • Segment potential customers to focus on those who will accept a higher premium

  • Conduct an assessment among your customers to evaluate the specific premium you (or your sales team) is getting, the probability of losing customers to cheaper alternatives on the one hand and to more trusted competitors on the other, and identifying areas where you (or your sales team) could improve trustworthiness and therefore market share and/or premium pricing

  • Develop customized training to form new habits that will change old behaviors, increase trust, and increase the Trust Premium.

Check out this page for additional information:

What’s Next for This Research?

The first step would be to correlate some of the factors to the Trust Premium preferences within the industry of financial advisors. The next step would be collecting samples for different industries and contexts to further explore the link between various factors and Trust Premium.


Want to hear more? Listen to the podcast episode at:

Dr. Yoram Solomon

Dr. Yoram Solomon is an expert in trust, employee engagement, teamwork, organizational culture, and leadership. He is the author of The Book of Trust, host of The Trust Show podcast, a three-time TEDx speaker, and facilitator of the Trust Habits workshop and masterclass that explains what trust is and how to build trust in organizations. He is a frequent speaker at SHRM events and a contributor to magazine.


The Book of Trust®, The Innovation Culture Institute®, and Trust Habits® are registered trademarks of Yoram Solomon. Trust Premium™ and The Trust Show™ are trademarks of Yoram Solomon.

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