Emotional intelligence can add to the bottom line of a practice, says executive coach Peter Webb.
Speaking at the CFP retreat, Webb says there is plenty of anecdotal evidence to prove this point.
“Partners that embraced emotional intelligence in a financial services organisation boosted profits by 390 per cent,” he says.
“So it is not a touchy-feely thing; it does affect the bottom line.”
Emotional intelligence is the ability to perceive, express, understand, and manage emotions, as distinct from general intelligence, which focuses exclusively on general mental abilities, such as memory and problem solving, Webb says.
“When the term emotional intelligence was first coined in 1990, it was defined as an ability to use information about feelings and emotions across four dimensions,” he says.
“These dimensions are the ability to accurately perceive emotions; the ability to use emotions to facilitate thinking, problem solving, and creativity; the ability to understand emotions and emotional knowledge; and the ability to reflectively regulate emotions for personal growth.”
Webb says financial planners need a high level of both mental ability (IQ) and technical knowledge to practice successfully.
“But these capabilities are only threshold requirements,” he says.
“And following the bad press planners have received recently, there is also the issue of planners delivering bad news.
“Planners are poor at delivering bad news, they are only good at delivering good news.”
Webb says to build sustainable long-term relationships with clients, advisers need emotional intelligence.
“What separates merely good performers from star performers is the ability to manage the adviser-client relationship,” he says.
“Research strongly suggests that emotional intelligence distinguishes between advisers more than IQ and technical knowledge combined, both in terms of client satisfaction and financial results.”
Webb says it is important advisers understand how they relate to clients and the use of positive psychology.
“In the past we looked at the psychological problems of depressed people, but nobody has looked at positive people,” he says.
“We are now studying why some people do so well and are so functional.”
Webb says the advisers who will succeed are those who can regulate their own emotions, accurately respond to emotions in others, and who can generate positive mood.
Those advisers with emotional intelligence skills seem to play a greater role in the performance of leaders at higher levels in organisations, he says.
“Despite the need for further research to properly identify what emotional intelligence really is, the popular belief is that purely mental abilities help — but emotional intelligence competencies help far more,” Webb says.
After the session, Webb believes advisers will be able to identify seven key emotional competencies for establishing successful relationships with clients.
Other skills to be learnt from the session will include the five steps of the cycle of change relevant to the client’s decision-making and the ability to apply behaviour skills for overcoming client objections.
