How emotional skills help financial advisors get ahead

Aspiring wealth management professionals can help solve the industry’s succession challenges by filling valuable roles in advisory practices — and advancing their own emotional intelligence.

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That was the takeaway from two sessions at the Conference of African American Financial Professionals, an annual event held this week in Chicago by industry training, certification and networking organization The American College of Financial Services. Emotional intelligence can act as a career accelerator for financial advisors and other wealth management professionals, according to one of the presentations. The other illustrated the wide range of jobs available to young people and career changers across the financial services.

Navigating a successful career requires gaining emotional skills in addition to the technical ones more often associated with a career in wealth management, according to Saundra Davis, an educator and advisor coach who is the founder of Sage Financial Solutions and the director of financial planning programs at Golden Gate University.

“What I quickly learned is that what I knew and my master’s degree meant nothing for the people that I cared most about. People don’t do what you tell them to do,” Davis said. “The techniques, the academics, the certifications will give you all of the technical skills you need to be amazing at what you do, and it won’t mean anything to your clients unless they’re ready. Now, if they’re ready, sure they’ll do it. If they’re not ready, maybe, maybe not.”

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A succession problem, and a solution

In the session, Davis broke down into four components of emotional intelligence that boosts advisors’ businesses and careers: self-awareness, self-regulation, empathy and relationship skills. Problems in advisory practices involving such behavioral finance topics may appear when advisors move into solutions to clients’ dilemmas too quickly before listening fully, when feedback triggers a defense mechanism, when a conversation doesn’t run its full course because a prospective customer says they need to think about it or when financial professionals’ invisible baggage shows up in the room, Davis said. Recognizing these emotional aspects of money and an advisor’s reactions to them can aid them in “understanding what is a client’s block” that keeps them from following a financial plan, she said. 

“You don’t have to be a therapist. You can use therapeutic practices,” Davis said. “That’s how you build a long-standing career. That’s how you build the deep relationships, where if people aren’t going to do what you say, you know it before they walk out. You don’t learn that the hard way later, which is what most financial professionals do. They learn it later.”

That emotional work could serve current and future advisors well, both with clients and in a field that must train people for lasting, rewarding careers. The industry is facing a slow-moving but significant succession planning challenge that revolves around recruiting the next generation of professionals and career changers from other fields. About 35% of advisors managing 40% of the industry’s assets anticipate retiring within the next decade, and a quarter of them say they’re uncertain about their succession plans, according to a study released this week by research and consulting firm Cerulli Associates.

With questions looming about the industry’s future, a combination of technical skills and emotional intelligence could help future professionals find their path into the field. Advisors rely on valuable team members who may ultimately decide they would rather be part of the support staff than a client-facing advisor.

“There are many different career paths,” Lindsey Lewis, the managing director and chair of The American College’s Center for Women in Financial Services, said in a session for the many college students in attendance at the event. “You really do have to do some introspective of what types of skills you want to develop. I know that individuals are always like, ‘I want to be a client-facing advisor,’ and then they get to, and they’re like, ‘Just kidding, I don’t want to be a client-facing advisor.’ So kind of think through, what are your best skill sets, how do you want to interact with clients, what do you want your day-to-day to look like, and then, do you want to be in more of a supportive role?”  

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The link between ‘money narratives’ and career paths

Those alternative roles include paraplanners, service advisors, operations professionals, marketers, public relations staff, graphic or web designers, cybersecurity analysts and positions in human relations or compliance. And, in a field that is notorious for lower pay early in advisors’ careers, understanding one’s own relationship to money could help prospective professionals identify the best career path for them. Sharing her own example growing up with food insecurity, Lewis suggested that the students keep the many disparate forms of compensation in mind as they consider their paths.

“What you need to navigate is, how you feel about this and how you feel about money, and how you feel about how you want to be compensated,” Lewis said. “I grew up with the mentality of, I have to have a consistent paycheck in order to make sure that I can take care of all these needs. … Those money narratives and those money stories are going to impact these things. So you can adjust these over time and get a little bit broader, but you need to understand how you feel and think and feel about money.” 

Grasping the emotional side of money and learning how to fully listen can help professionals better serve clients and build successful businesses. Davis shared a personal example of buying an insurance policy while she was in college.

“I was a broke student,” Davis said. “Somebody sold me a policy that I couldn’t afford. I bought it in a moment, because she pulled on my heartstrings about my son. I canceled that thing like two months in, because there was no preparation. She sold me, but she didn’t understand me. She didn’t know how afraid I was. She didn’t hear a word I said.”