Emotional Intelligence is essential to building and maintaining a successful financial advisory business because the financial services industry is a people business. If you cannot connect with people, you will not be able to set the appointments, open new accounts, gather assets and build a thriving practice.
There are two distinct types of intelligence- intellectual and emotional- each of which activate distinct areas of the brain. The intellectual intelligence or “book smart” is measured in terms of IQ, while emotional intelligence or “people smart” is measured in terms of EQ.
So what does this have to do with being a successful financial advisor?
Many people feel that having a successful business is about assets under management when “relationships under management” is a better interpretation. Without the relationship(s) you would never gather the assets and without maintaining a good relationship with clients, you would not keep the assets that you have gathered.
The following are 5 Core Competencies for Building Relationships and Increasing your Emotional Intelligence.
1. Emotional Self-Awareness:
This means knowing what emotions we are feeling at any given moment, and being aware of how our emotions, feelings and personality impact ourselves, clients and prospects. The emotionally self-aware financial advisor has a high ability to tune into changes in feelings from moment to moment being able to understand when feelings change and why. This type of advisor has a greater advantage over his or her colleagues because they are able to have a greater level of certainty of how they are feeling and why. This is the foundation of all of the other competencies for building relationships. Managing your level of self-awareness in an emotionally uncertain work environment is the key to controlling your own mental state, your business and your life.
2. Emotional Management:
This means knowing how to manage emotional states to regulate emotions that have a negative impact on you, the task at hand and/or your business. Emotional management is about being able to restrain from emotions that could possibly jeopardize your relationships with yourself and others as well as being able to “bounce back” from any and all emotional set backs.
Advisors with high levels of emotional management can regulate anxiety, fear and irritability. Typically, these types of advisors do not take rejection personally, but rather see it as a necessary part of sifting through non-qualified prospects in order to find a qualified group of people whom will one day form a great client base. Advisors with low levels of emotional management tend to let a host of negative emotions dictate their day and as a result usually wash out of business.
When you work in the financial services industry you are working with one of the most emotional subjects that people have…money! Whatever values your clients place on money, you can be sure of one thing…money elicits emotions both good and bad. To become successful in this business you must be able to regulate your own emotions in order to not get caught up in theirs.
Self-Motivation is being able to regulate ones’ actions towards the pursuit of ones’ goals regardless of perceived setbacks, adversity, discouragements and frustrations. Self-motivation focuses on positive short, intermediate and long-term accomplishments. It is about delaying any activities that promote short-term gratification at the risk of slowing down or halting activities that will get you to your long-term goals.
The highly self-motivated advisor knows what activities they need to do each day to obtain daily, weekly, monthly, quarterly and yearly goals and follows through on those activities.
4. Having High Levels of Empathy
Empathy is a cornerstone of building relationships because true empathy takes the other persons perspective into account and leaves any possible conflict of interest behind.
Our business is a business of trust. To truly be trusted by prospects and clients they must first be convinced that you truly understand what they are feeling. People want to work with those whom they believe understand them. The highly empathetic advisor is more aware of the clients’ feelings and will convey that message, thus building trust. They have honed their listening skills as well as their ability to detect subtle social signals that indicate how the prospect or client is feeling, and they are not afraid to ask the client how they feel. This skill is imperative to being a successful financial advisor!
5. Understanding Relationships under Management:
Being able to manage relationships by managing emotions in others and having the ability to read social situations, communicate effectively and interact with a high level of confidence are all a part of relationships under management.
They can quickly diffuse client conflicts by simply listening to the clients’ concerns, assessing the clients’ emotional state, expressing empathy, utilizing reflective listening, and assertively responding to the clients’ request. In effect, the advisor simply controls the emotional climate by controlling their own emotions and managing the emotions of others.
You use emotional intelligence in your business by understanding and increasing your emotional competencies.In other words, it is not enough to be aware of emotional competencies; you must consciously strive to increase your emotional self-awareness, manage your emotions, and become self-motivated and highly empathetic in order to increase your relationships under management.