One Skill That Has The Biggest Impact On Financial Advisor Success

or CREATE AN ACCOUNT TO SAVE ARTICLE TO YOUR LIST

Executive Summary

What one skill (above all others), if you developed and did it in an excellent fashion, would have the biggest impact on you as a financial planner?

This is the question that was posed to the leaders in the financial planning profession. Initially, the plan was to elicit feedback as to where to focus energy in the new year to become a better advisor, but after receiving so many excellent responses I wanted to share the common themes. What is the most important skill? There is always a big focus on the technical side of planning (which is obviously very important), but is it that the most important? Or is it empathy, communication, or relationship building?

The answers varied by the leaders that responded, but the common theme was clearly that in the end, the interpersonal trumps the technical.

Author: Richard Durso

Guest Contributor

Rich Durso, CFP, is a financial planner with RTD Financial Advisors, Inc., in Philadelphia, PA. He can be reached at [email protected].

Empathy was a common theme throughout. Roy Diliberto and Rich Busillo, both of whom are my mentors at RTD Financial Advisors, believe that empathy is the one skill that is most important. This essential skill develops trust and helps the advisor understand the client along with their goals, values, dreams, and fears. Brett Danko echoes the same thoughts by defining empathy as the intellectual identification with or vicarious experiencing of the feelings, thoughts, or attitudes of another. Analytical skills are necessary but empathy is by far the most important. You must be able to understand your client’s hopes and dreams through empathy. Ross Levin also believes that the most important skill in being a sound financial planner is empathy, followed by curiosity. I interpret Levin’s curiosity as being a student of the profession, and having a genuine interest in effectively solving client concerns with the most appropriate solution. Dan Moisand gives the edge to empathy as well, and defines it as being able to see things from another person's perspective. Moisand says that the better you understand before being understood, the more effective you will be. This leads to satisfied clients who are more apt to tell others about the good experience. Marc Freedman explains that there must be a continual reminder that people look to you as a leader in their life. It is a planner's job to make sure that you give equal attention to their emotions as well as finances. People look to you for answers. Use your objective guidance and explore all of the alternatives to make the clients feel satisfied with their decisions.

Communication is a natural extension of empathy. To effectively communicate, empathy of your client’s situation must be evident. Deena Katz defines communication as the ability to synthesize complex information, inspiring clients to make difficult decisions, and helping clients become happy with their choices. Essentially this is managing client expectations well. John Hochschwender also states that getting people to move forward on their goals by implementing their recommendations is most important. Hochschwender believes that you must be confident in your financial planning education and must know that you have the resources available to handle any situation that may arise. The communication theme is further supported by Bob Veres, who also believes that communication skills trump everything else. Veres describes communication as written and verbal skills and the ability to articulate complex ideas. A great communicator is someone who is able to connect, relate, process and establish an effective line of mutual communication, and deliver great information with great sincerity and visible concern for the welfare of the person sitting in front of them. No matter what your profession, being able to do this leads to greatness which is even more important for financial planners. Relationship building is the supreme skill for Jeanne Robinson. She says that good counseling and listening, along with a high level of sensitivity to clients’ needs and concerns is the key to relationship building. Michael Kitces believes that technical, communication, written, verbal, motivation, public relation skills are all necessary, but listening skills are the most important. Kitces states that having the technical knowledge is not relevant or useful if you can't truly understand the needs of your clients in the first place. I think Nick Murray sums it up by explaining that the most important skill is listening to what people are not telling you. I think in order to eventually develop this masterful skill; you must be empathetic and truly care about the people you help through financial planning.

Elizabeth Jetton discusses developing the knowledge and skill to empower, engage, and educate. Communication and listening skills are key, but Jetton says that you need to research what actually impacts behavior. For example, what has worked over time in terms of investment strategy in the face of uncertainty? How do adults learn and change behavior? Given uncertainty of both positive and negative occurrences, how do you integrate goals with investment strategy to have the greatest chance of financial success?

As someone who trains advisors, Mitch Anthony thinks that transparency is that one skill which leads to expeditious trust and connectivity in the client/planner relationship. Anthony further explains that self-disclosure, candor, and lack of salesmanship are the hallmarks of the transparency which leads clients to follow your advice.

Harold Evensky believes that a combination of skills will lead to success. These skills include technical competence, writing and speaking skills, and public relations. Gaining technical knowledge is a continued effort gained from attending conferences as well as reading academic texts and professional journals. Writing articles and performing speaking engagements ensure that you will stay abreast of the profession; it forces you to remain technically competent. Evensky believes this leads to public relations. Growing your practice is a key component of success. Small practitioners may have limited marketing dollars but can build their brand through public relations. Speaking and writing are the best ways to build your brand and to become recognized as a source for the media.

Elissa Buie wishes that she could “bend time!” She says that spending more time being quiet and thinking deeply about your clients, your firm, and your profession have a profound impact.

It appears that the most common skill set from the leaders of financial planning profession lie at the intersection of empathy and communication and its impact on relationship building and motivating clients to action. For those who are not yet at that point in their careers, Bob Veres helps with the next logical question: How best can I get there?

As Veres advises, mastering the basics of financial planning leads to developing the confidence which is the foundation. Strive to learn and refine your craft. Once the foundation is laid, you have to develop empathy and allow clients to see the sincerity. Listening and communication skills naturally follow. Veres suggests doing this in each and every interaction. “The truest thing I can tell you about a career is that we are always practicing to be the person we want to be, to deliver the value that we believe is important. There is nothing more important than constantly training to be the person you want to be. If you do these things with any consistency at all, you'll very quickly be head and shoulders above your peers.”