Speaking with ifa, Natallia Smith, founder and principal financial adviser at TruWealth Advice, explained how her psychology qualifications enhance her abilities as a financial adviser.
After emigrating to Australia in the early 2000s, Smith found herself low on funds and looking to start a career.
“I had a neighbour who was a financial adviser and I thought it was very interesting that they teach you how to manage your money and so I got into that industry,” Smith said.
“My first degree was in psychology, and then I went back to university and I did finance, and then financial planning qualifications.”
Given her growing interest in money and existing qualifications, she explained that financial advice was a “fascinating combination of finance and psychology”.
“It’s beautiful, and it’s all about relationships and understanding and empathy,” she added.
“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.”
Smith explained that her knowledge about psychology serves her well as an adviser, helping her better understand and communicate with clients, particularly those who are going through highly emotional situations such as divorce and bereavement.
“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,” she said.
“Money is just a tool to achieve what they want to achieve in their life but in a lot of cases, and because I do deal with women, a lot of it is really just that feeling of security and safety and being in control of your own life, and money is just an enabler.”
She further noted that there is a common misconception that advice is “very dry, very numbers oriented, very rational, logical. But it’s not. It does have that component to it, but a lot of it is all about emotions”.
“It’s not just about just investing and managing portfolios, it’s so much more than that,” Smith said.
“We are an industry that is relationship based. We are an industry where you deal with other people and you help them … we’re helping people to get a better life.”
Like many other advisers that join the profession from a variety of backgrounds, Smith said her background in psychology has helped her develop a unique set of skills. In her case, this has taken the form of “soft skills”, which is particularly useful as she specialises with women going through divorce.
Smith added that the intense relationship between finances and emotions, as many decisions about the former are based on the latter, has also highlighted the value of this psychology experience.
“Ninety per cent of purchases are made based on emotions, so it’s all about understanding how we can have a better life and provide better advice because people that we see, our clients, are going through many emotions at any particular time,” she said.
Having a Social Work and Psychology background, I was taught how to establish instant rapport. If people don’t trust you regardless of your technical skills, you are not going to win the business.
Unfortunately, none of these skills are recognised by regulators and here we are, adviser numbers declining and an industry engulfed in that much red tape that it will struggle to gain momentum.
I came from a Teaching background and then spent 33 years in Financial Planning.
I can categorically say that some of the very best skills that I had were the ability to transfer complex principles and information into an comprehended and understandable form of explanation by which the client could make informed and clear decisions.
Skills such as empathy, rapport and to allow a client to talk for as long as they need whilst you listen & learn about the client characteristics & behaviours are infinitely important.
Financial Planning is first and foremost a people business.
If you are not a good people person, then you may as well not be there.
It is always more important to listen than speak.
I 100% agree with what is said here.
Unfortunately, there is a bunch of people in Canberra who don’t understand this value at all.