As a financial advisor, you’re already viewed by many of your prospects and clients as an expert in your field. But people do business with those they trust, so you can’t count on knowledge and experience alone. Your clients must feel they can rely on you.
Therefore, an advisor with a high degree of emotional intelligence has a better chance of establishing a relationship with a client than one who can’t recognize or read emotions.
Specifically, someone with a high EQ understands how emotions affect thinking and behavior. They use this ability to relate to and interact with others.
In other words, an advisor with a high IQ and a high EQ can go far.
EQ Appears to Run in the Profession
The good news is that advisors are starting from a place of strength.
In a ThinkAdvisor article, “Emotional Intelligence and Success,” author Regina Bedoya referenced a recent consumer study conducted by Harris Poll on behalf of the Million Dollar Round Table, of which she is a member. The survey, which measured the effect of distrust in the financial services industry, found most clients trust their advisors.
Furthermore, EQ is twice as valuable as IQ and technical ability in determining success, Harvard Business School research found.
Gauging Your Emotional intelligence
How does one know if one has a superior EQ?
If you have to ask, you could be lacking one of the key qualities of those who do: self-awareness. Experts say an emotionally self-aware person understands their own emotions and how they affect their performance.
Leaders who are low in emotional self-awareness fostered negative climates 78% of the time. By comparison, 92% of leaders with a strong sense of emotional self-awareness had energetic, high-performing teams.
To get an idea of your emotional intelligence, take this quick quiz offered by the Institute for Health and Human Potential. Not only is it fast, but you also won’t have to wait long for the quiz to generate your results. That’s a plus if you tend to be impatient.
EQ Important More in a Downturn
Having a high degree of emotional intelligence and empathy always serves a financial advisor well. (Our own Patrick Schartz discusses this in a blog about delivering a great client experience.)
You’ve probably heard this saying before: “No one cares how much you know, until they know how much you care.” This emotionally intelligent quote comes from former President Theodore Roosevelt.
However, during times like these, with a pandemic and business losses affecting many advisors, prospects and clients, EQ becomes absolutely critical to financial advisor success. For over a year, many advisors haven’t been able to meet with clients face to face. As a result, online, email and phone communications with clients have had to become more personal than ever.
If You Don’t Care, Neither Will Your Clients
When markets began their downturn, investors worried about their assets and retirement nest eggs. Advisor Magazine predicts clients of advisors who haven’t stayed in touch during this difficult time, answered their questions and eased their fears, may move on as the markets stabilize.
The upshot is that in good times and bad, financial advisors who communicate well and often with their prospects and clients, are the ones who are going to come out ahead of their peers.
For over 25 years, LeadingResponse has partnered with financial advisors to engage and acquire new clients and scale up their businesses. Learn more about how we help them thrive.