Speaking in a Colonial First State (CFS) webinar, founder and director of Performance Advisory Group, Kylie Denton, explained that emotional intelligence plays a critical role in an adviser’s ability to connect and understand clients – a key step in delivering the best outcomes for them.
“In the world of financial planning, technical skills are important, but emotional intelligence is what sets exceptional advisers apart. It’s the ability to connect with clients on a deeper level, understand their fears, hopes, and dreams, and guide them towards their financial goals with empathy and compassion,” Denton said.
She defined emotional intelligence as “an ability to use and manage your own emotions in positive ways to relieve stress, communicate effectively, empathise with others and overcome challenges and diffuse conflict”.
Denton argued that advisers who neglect emotional intelligence fail to consider how that could impact their relationships with clients, putting them at risk of inadvertently alienating them.
“One of the things that we need to consider, and there is an absolute risk of, is that clients will opt to self-manage their finances and disengage entirely with financial planners if we don’t connect with them in a way that really resonates and in a way that the newer generation wants us to do.”
Denton added: “Your EI is your ultimate tool in building trust and credibility with clients. It’s not just about what you know, but how you make others feel that truly matters in the world of finance.”
Further to this point, Denton explained that advisers who utilise emotional intelligence to build stronger relationships tend to benefit from a more loyal client base.
“It matters. It matters a lot when it comes to financial services. What we do know, and I do not know any research out there that indicates differently, is that clients who feel understood and supported by their advisers are more likely to stick around, and recommend them to others, which leads to business growth.”
“When we have better quality conversations with our clients, then we’re going to connect with them at a level that they’ve never seen before, and have that deeper, more trusted and intimate relationship.
“We also know that clients of emotionally intelligent advisers are 40 per cent more likely to remain loyal to their advisers, 74 per cent of clients report higher levels of trust in advisers and who display emotional intelligence.”
Speaking with ifa earlier this year, founder and principal financial adviser at TruWealth Advice Natallia Smith described financial advice as a “fascinating combination of finance and psychology”, noting the value of her own psychology background.
“They come to you for a reason, so understanding what they’re going through and having that empathy, having that right communication style, is really, truly important and makes them feel safe so they can actually trust you,” Smith told ifa at the time.
“Understanding their [clients] needs, understanding what emotions they’re going through, it’s just so helpful. I truly think that communication is so important and understanding how you run a meeting when you’ve got a client in front of you and they’re going through a very difficult time.”
At Striver’s Brimstone event in Sydney earlier this year, head of advice proposition for Zurich Assure Ben Smith argued that, while technical skills are important for those in financial advice, emotional intelligence is crucial for those hoping to step into higher, more client-facing roles.
“Technical skills will get you so far, but if you don’t have a balance [with soft skills], if you don’t have good emotional intelligence, if you don’t have the ability to relate and work with people, if you don’t have a strong work ethic, you’re probably going to be limited to very technical roles,” he said.
“Technical skills can be developed. Some of the other stuff you can’t pick up as easily by classroom learning, so that balance is important.”
