One topic starting to crop up more in the advice sector is emotional intelligence (EI) – essentially, an awareness of how your emotions and the emotions of others can impact behaviour, communication and wellbeing.
With the role of advisers now being primarily about building and maintaining client relationships, soft skills like empathy and communication are essential to do the job well. This is particularly true now advisers are required to identify and support clients in vulnerable circumstances.
Could advisers benefit from learning how to boost their EI?
Relevance
Training consultants specialising in EI say it has become relevant to advice as an extension of financial wellbeing, coaching and behavioural science. As advisers are at the front line of people’s emotional lives, it makes sense to look at the role emotions have in communication and relationships.
“The danger is that people might see it as ‘wishy washy’ or ‘woo-woo’ but it’s grounded in reality,” says Emotional Finance founder Emma Boardwell, a financial coach and former psychotherapist.
“It’s just real life – noticing what you like and don’t like, or what bothers you and doesn’t bother you.”
Boardwell says people come to advisers at emotionally transitive times – after a divorce, during a bereavement or having had a child.
“Advisers need to be able to connect with them on an emotional level to build trusted, allied relationships,” she says. “The value placed on advice is around relationships and peace of mind clients get – but you only get peace of mind if you trust the adviser.”
Trust always motivates the client-adviser relationship and that’s where EI comes in.
“The bedrock of trust is integrity, competence and transparency,” says Boardwell. “High EI has all those facets – they are so interlinked.”
Although EI appears to come more naturally to some people than others, Boardwell says this is because it has been taught to them while growing up, rather than an innate ability.
“I do think you can be taught this, but you have to want to learn it. It really involves practice and getting feedback – it’s the lived experience of it as much as being shown how to do it,” she says.
In their latest book, The Heart of Finance: Emotional intelligence for financial planners, James Woodfall – founder of consultancy firm Raise Your EI – and the Emotional Intelligence Academy director Cliff Lansley explore EI in the context of financial advice.
They say technical competence is a given because advisers need to pass their exams to get qualified. But there is no mandatory training for the ‘people’ side of the job, such as how to reassure clients, listen to them and motivate them to act.
While researching the relationship between advisers and EI, Woodfall and Lansley found those with higher EI achieve higher sales, get more referrals and retain more clients.
“If you are high in EI, you perceive emotions in others and use that information to enhance communication,” says Woodfall, a former financial adviser.
Emotions in context
Perceiving emotion in others, especially before it becomes obvious through their behaviour, can help advisers shape their interaction with that client to gain the best outcomes.
“Each emotion has its own trigger and motives, so people behave in different ways,” says Woodfall. “For example, if someone is happy, it’s a good emotion in a client meeting, as long as this does not lead to impulsive behaviour.”
Happiness can lead clients to be very enthusiastic about an investment proposition, for example, and perhaps less focused on the risks. “Be aware that emotions can be the catalyst for a client’s decisions,” says Woodfall.
Once advisers perceive a client’s emotional state, they may need to take it into consideration when giving advice. For example, where a client has experienced a bereavement and is grieving, EI can help identify any vulnerabilities.
“As an adviser, you have to think about whether they have the capacity to understand the benefits and risks of what you’re telling them, or the complexity of the advice,” says Woodfall. “It might be best to cool off and revisit it once they are in a better state.”
Woodfall says advisers may have a gut feeling that the client has not entirely understood the advice they’ve been given. Reading their facial expression and any changes in body language could provide clues.
“Check they are understanding what you are saying – this could give you new information that makes you think this is not the best time for making this decision,” he says.
Helping yourself
EI is not all about the client – self-awareness can help advisers with their own emotional wellbeing, which, in turn, will enable them to continue supporting their clients.
“An adviser’s job is to deal with emotions all the time; it’s a stressful job. Be aware of your own emotional needs as well as awareness of how clients are coping,” says Woodfall.
Boardwell, having spent 12 years as a psychotherapist, agrees.
“Part of the work on the development of EI is understanding yourself better,” she says. “I trained as a psychotherapist and part of that training is developing self-awareness so you can separate out [from your clients’ emotions] and prevent yourself from being triggered.”
Learning how to regulate yourself so you know what you need when you’ve had a bad day can help, so you’re not dragging feelings around with you as baggage that shapes what happens next.
“Say you just didn’t feel right about something that happened,” says Woodfall. “More emotionally intelligent people would understand there was a boundary violation or interference with their values, so that’s why they’re angry.”
But what can you do about it? There are times when emotions need to be regulated before it biases a decision or influences how you act towards other people.
“If you’re angry, can you put the brakes on your emotions? If this isn’t an angry context, you need to interrupt the process, as, if you let it out, it might damage the relationship,” says Woodfall. “It’s a judgement call.”
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