Emotional Intelligence For Financial Advisors

If there are two inevitables in life, death and taxes, then there are similarly two topics that cause people the most anxiety to discuss: money and sex. But money, and specifically investing and taxes, is an area that needs the most discussion. How can financial advisors improve their skills to help make clients more comfortable in discussing financial performance? Many business coaches are encouraging those in client-facing jobs, like sales and customer service to focus on emotional intelligence.
 

What is emotional intelligence? It’s most often defined as the ability of individuals to recognize their own emotions and those of others, and use that information to guide decisions and adjust their emotions to adapt to different environments. In short, it is the ability to read other people’s emotional signals and determine the appropriate response to those signals. Most who research and report on emotional intelligence note five elements of it: 1) self-awareness, the ability to recognize emotions as they happen; 2) self-regulation, how you manage the emotions you are having (i.e., the duration of a negative emotion); 3) motivation, or the ability to change negative thoughts so that goals can be achieved; 4) empathy, or the ability to recognize how other people feel; and 5) social skills, the ability to interact with others face to face.
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Emotionally intelligent folks inspire confidence in their co-workers and teammates, as well as clients. This may be because the self-awareness and self-regulation elements allow others to trust the emotionally intelligent among them. Others remark that those two traits make their emotionally intelligent coworkers more adaptable to changing work situations. As to motivation and empathy, emotionally intelligent folks are seen as having higher levels of commitment as well as optimism. This may be why emotional intelligence is linked to leadership. Commitment also leads to resilience, ability to bounce back from rejection or failure.
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In sales, and client-service occupations, like financial advising, emotional intelligence has been shown as critical to those who can close the gap between what their clients are saying they need and how the sales person can deliver on those needs. Some experts, like Colleen Stanley, attribute emotional intelligence as helping sales people to separate their anxiety about closing the deal with what their client is saying, so that communication is clear. Another expert notes that emotional intelligence helps those in client-serving occupations disqualify opportunities. That is, they don’t pursue options that could be suboptimal for client or advisor early. That keeps their performance up, but also keeps them motivated.
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So how can you increase your emotional intelligence? In short, know yourself. It can be as easy as taking notes on what pushes your buttons, what kind of situations cause you to lose your cool. Another suggestion is to be clear on having time off from work and other activities. Colleen Stanley notes that being unplugged for a short time can help people gain insight into their emotions and reflect.
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Another suggested way to improve emotional intelligence is to separate do from who. That is, to see activities as a role and tasks to perform, rather than as your identity.  This helps client services folks stay focused on the client, since identity traits (like honesty, loyalty and confidence) don’t change from situation to situation. In other words, if a financial advisor says focused on the client, they don’t take rejection personally.
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Emotional intelligence also helps prevent and manage conflicts. By understanding and acknowledging client’s emotions, a financial advisor can prevent emotions from leading to conflict, or where conflict does arise, the advisor can match an appropriate response to the client’s anger or anxiety about a situation.