Confidence, Why it Matters in Growth and How to Get More
Originally published in Advisor Perspectives.
The pursuit of growth requires the belief that it’s possible, which is another way of saying you need confidence.
Confidence is the belief that one can rely on someone or something. Often, when working with financial advisors, it’s the ability to trust in themselves.
Do you have trust in yourself and in your abilities to accomplish your goals?
The answer is usually somewhere between “yes” and “no.” A strong “no” signals underconfidence. An unwavering “yes” hints at overconfidence.
Underconfidence causes you to avoid taking action, necessary risk and new opportunities. On the other end of the spectrum, overconfidence causes you to take unwarranted risks and irresponsible decisions and actions. When you’re managing others’ money, overconfidence can have significant negative affects on not just you and your business but your clients’ lives.
I work with a variety of advisors. But there is a common topic that continually comes up – confidence.
Most advisors want more confidence, especially when it comes to their ability to grow. If they don’t want more for themselves, then they want more for their staff.
When it comes to growth and influence, confidence matters – why?
It matters for intrinsic and extrinsic purposes. Intrinsically, if you don’t believe that it’s safe or possible for you to succeed, then you won’t try. Extrinsically, first impressions inform how others feel about you. If you don’t come off as likeable, trustworthy or competent you will struggle to build and maintain relationships.
Among the advisors I’ve met and worked with are a handful that stand out as very capable of generating and closing new business. They also happen to be confident. How do I know they have confidence? I just know.
According to research, nonverbal confidence is most helpful in building likability and trust. On the other hand, someone who is verbally confident, brags or praises themselves often come off as arrogant and narcissistic.
If confidence is a state of being, what cultivates (or erodes) that state?
Based on research, observation, reflection and testing, confidence requires three things:
Competence
Coherence
Community
Let’s take a deeper look at the three attributes of confidence.
Competence
One of the easiest ways to increase your confidence in a specific area is to increase your competence in that area.
If you want to get better at sales, develop your sales skills. If you want to increase your effectiveness with your team, develop your leadership and management skills. If you want to be viewed as an expert, gain credentials such as the CFP, CFA, specialize in a specific area or get recognized by a third party as an author or talking head.
Competence isn’t just hard skills; soft skills matter too.
We glean a lot of information from a first impression and engagement. Consider your body language, tone of your voice, energy and environment.
Someone who is confident will look the part. You can tell through a handshake, posture, eye contact, tone and smile.
Consider these common questions investors have when they are considering working with a financial advisor:
Will this person do what they say they will do?
How will they react during a crisis? Note, according to a October 2020 research study conducted by DALBAR Inc., the vast majority of investors polled (86%) said they’re significantly or slightly more confident in their financial professionals on the back of market volatility. Similarly, 87% said they trust their advisors more, while the same percentage said they’re more likely to retain those advisors. They found that proactive communications had the greatest impact on a feeling of confidence and trust.
Are they qualified? Can they help me and my situation?
Can I trust them and their team? Will I like working with them?
Can a prospect gain insight into the answer to these questions non-verbally? The answer is yes!
As a potential buyer, we often seek to validate our initial impressions by doing research, asking questions and requesting information but our initial instinct is an important baseline.
Finally, consider why referrals are such powerful leads (hint: they leverage community to provide the referee a feeling of confidence).
Coherence
To be coherent is to be in alignment with your values, purpose, desires and beliefs. Think about a time when you cared about a cause. How confident were you in your actions in support of that cause? Likely, the answer is very confident. As the old saying goes, “Where there’s a will, there’s a way.”
Also, consider a time when you’ve been part of a company, team or project that’s aligned with your values versus in opposition or misaligned to your values. How did that alignment (or misalignment) impact your ability to show up consistently, over time?
When you’re not in coherence the work can feel exhausting, forced and uncomfortable. When you’re in coherence it feels natural, effortless, and fulfilling.
Community
Competency and coherence are about self, community is about your connection to others. When we feel part of a community, we feel safe, empowered, protected and capable to do more than when it’s just us. There is research that supports the claim that the quality of our relationships impacts the quality of our life.
When we take risks and push our limits, sometimes we fail. We need people we trust and can rely on to support us in the good and hard times.
On the other hand, being able to positively impact others in our community provides a sense of worthiness and purpose.
Promote confidence in others
Up to this point we’ve been focused on how you can build confidence. What about how you can support others to have confidence in you and in their decision to work with you?
If we use the three Cs framework outlined above, which assumes confidence is largely based on competence, coherence and community, we can we use these tenants to our advantage in marketing and development efforts.
Confidence accelerator exercise
Identify areas to enhance your confidence using this confidence accelerator exercise. Consider the scenarios below and note how you may enhance your competence, coherence and sense of community for yourself or when enhancing with key audiences such as investors, clients, and your team.
Is confidence holding you back? If so, where? What is possible if you increased your confidence in those areas?
As we seek to grow our feeling of confidence will naturally fluctuate. With knowledge of the attributes driving confidence, you now know how to develop strong belief in yourself and cultivate others’ belief in you as you strive for new goals.
