When someone makes the effort to see a financial planner, it probably isn’t because they woke up that morning thinking – “I fancy going to see a financial planner today.”
It’s more likely to be precipitated by a significant transitional event in their life – usually an event with a significant amount of emotional content attached.
Just the simple act of sitting opposite a financial planner can be anxiety-producing for many people. And for an unfortunate few, finally garnering the courage to see a planner and then ‘fessing up’ to their behaviour around money, is likely to produce the level of anxiety normally reserved for dental extractions.
As the planner, how to provide a ‘holding environment’ for the client interview and handle the emotional content will have a big impact on how the client feels when they leave the appointment. People remember how they felt about you long after they have forgotten the other details of the meeting. The question then becomes not just…are you listening…but how skilled are you at listening with empathy and real understanding?
So dealing with clients on complex, emotive issues requires significant skill; even more so when those clients differ in age, education and background from the financial planner. How do we train younger planners to be emotionally competent enough to hold a dialogue with clients old enough to be their parents? How do you train the ‘kids’ to listen to ‘Mum and Dad’?
Good solutions can be found in the concept of ‘emotional intelligence’ (EI) that has become prominent in business and coaching, and popularised in the media, largely due to Daniel Goleman’s bestselling books.
EI can be defined as a “set of abilities that enable a person to generate, recognise, express, understand and evaluate their own, and others, emotions in order to guide thinking and action that successfully cope with environmental demands and pressures”.
Even though ‘hyped’ initially, building EI skills is still thought to be vitally important for workers in client facing-roles and jobs that rely on interpersonal interactions for success.
Financial planners prove no exception. A 2006 survey amongst US-based financial advisers showed that 25 per cent of a financial planner’s job is devoted to non-financial coaching and that they are often called to provide counsel regarding personal and life-changing issues. Also, 74 per cent of the planners surveyed had dealt with clients in distressed emotional states.
Despite all these drivers for change, planners receive little in the way of training in how to deal with emotionally-charged situations, let alone formal coaching in emotional competencies. It may be easier to train for technical competencies but the value of training for emotional competencies or so-called soft skills cannot be underestimated. So, here’s an overview of what you can take from the latest in EI research to help you today in your practice.
First, just how ‘emotionally-intelligent’ are you? Perhaps not as much as you might think!
People generally over or underestimate their level of EI. There are a plethora of online tests available, but it’s best to stick to EI tests that have a degree of academic credibility. A good example is the Mayer Salovey Caruso Emotional Intelligence Test (or MSCEIT) which was created by the researchers who originally coined the phrase itself.
If you are a woman – there is good news! You are likely to score higher in EI, particularly your abilities to recognise different emotions in yourself and other people, and also use your emotions appropriately to guide your thinking and actions.
Knowing your score is just one aspect of EI.
Your EI score reflects your ability or potential. It’s just as important to realise that score with your emotionally-intelligent behaviour and actions. A useful parallel here is a high school student who tests for a high score on an IQ test (which measures mental intelligence) but decides not to go on to tertiary education and takes a low-paying job instead. We would probably say that person is not using the most of their potential.
So now you know the score, can you improve your EI? Can you enhance your emotional competence to create more effective relationships with clients?
Developing EI involves four main dimensions.
- First, perceiving emotions or being aware of emotions in yourself and other people.
- Second, you can learn to ‘unhook’ from thoughts and feelings, especially when they are unhelpful.
- The third dimension is developing an effective emotional orientation – being present with your emotions and using them to guide your actions.
- And fourth is committing to valued goals and actions. There is no point in becoming aware of, and dealing with your emotions, if it’s not in the service of something greater – i.e., committing to goals and actions are important, as this leads to having a fuller, richer, more meaningful life.
Programs that have successfully raised the levels of emotional and social competence in adults include the Emotional Competence training program, being used with managers at American Express Financial Advisors since 1992.
A recent evaluation study showed that advisers of the managers who received this training grew their businesses by 18.1 per cent compared to only 16.2 per cent for those advisers whose managers did not receive the training.
In a survey carried out at a US-based insurance company, sales agents who were weak in emotional competencies such as self confidence and empathy, sold policies with an average premium of $54,000. In comparison, those agents who were stronger in at least five out of eight key competencies sold policies worth $114,000.
So enhancing your EI can improve your sales performance.
Higher EI has also been shown to equate with better performance in a range of work settings and this holds true, even when personality factors and IQ are taken into account. As a leader in your practice, you can also use EI skills to influence the mood, motivation, and performance of your employees. A recent study showed that transformational leaders helped their subordinates remain in a positive mood while interacting with each other and with their customers.
Coaching is also a great way to acquire and practice EI skills – even abrasive executives at work can be coached to acquire emotional competencies. In contrast to cognitively-based coaching, emotion-focused coaching places greater emphasis on the perception and regulation of emotions to aid the development of the person being coached and help them achieve better performance at work.
Coaching can help you further enhance and practice the skills obtained from a workshop or training program. The point of any good training is not just to learn a set of skills but to actively use them in pursuit of your chosen life directions or values – an experienced executive coach can help you do that.
So, if you do decide to participate in emotion focused training or coaching, what can you expect to gain?
EI skills include:
- gaining a heightened awareness of your own emotions
- learning to accurately ‘read’ others to improve communication
- creating emotional states to enhance problem solving
- learning new strategies to deal with difficult or conflict situations at work
- creating genuine dialogue with clients.
There may also be some things that you need to unlearn. For example, effective EI training does not include strategies or tools for suppressing or controlling emotions. A lot of us spend time trying to avoid certain feelings, such as anxiety or anger. Some of us even get anxious about feeling anxious and it becomes a vicious cycle.
Research shows that trying to suppress emotions may work in the short term, but over the long-term, actually make things worse; leading to even greater levels of depression or anxiety.
It can be useful to make a list of all the strategies you have used in the past to rid yourself of unpleasant or unhelpful emotions.
Then ask yourself honestly – how many of them have worked long-term? Instead of control or suppression of emotions, there are better emotion regulation strategies available from the practice of mindfulness.
Mindfulness has been practiced in the East through various forms of meditation for centuries. In today’s busy world, new techniques have been introduced through modern psychology that can supplement these older practices.
One mindful alternative involves learning to accept your emotions and emotional experiences. Accepting means that you practice allowing your emotions to just be there as they arise, without judging, trying to control or change them.
A good start is to act like a curious scientist and just notice and name your emotions as they come up.
For example, “I notice I am having a feeling of anxiety…” There are literally thousands of mindfulness techniques to learn and practice, but most stem from this simple nonjudgmental ‘noticing’.
Also important for EI is developing a sense of empathy, both for one’s self and other people.
Studies have shown that encouraging a sense of self-compassion leads to a greater sense of wellbeing and buffers people against having negative feelings. Fostering empathy for clients promotes better dialogue and builds more trusting client relationships. This in turn leads to clients who are advocates for your practice, ensuring longevity of relationships and better quality referrals.
Dealing with an emotionally-difficult interview can be a make or break point in your relationship with a client and will bring all your EI skills into play. When dealing with an angry or fearful client, it’s important to understand that emotions are messengers. Ask yourself, “What is the client trying to convey?”
Also note that a surface emotion such as anger may be covering an underlying emotion, such as fear
So what are some tips for dealing with emotionally-charged situations?
- Anchor yourself in the present…breathe…keep your feet firmly planted on the floor.
- Resist the temptation to provide a premature solution; practice empathic listening and questioning. For example, “I’m so sorry you were fired. How can I help you today?”
- Make statements that take responsibility for what you are noticing. For example, “I might be wrong here, but you seem quite anxious about the situation…”
- Validate and normalise the client’s feelings and actions. For example, “It’s completely understandable to be angry in these circumstances…if our roles were reversed, I would be feeling angry too.”
Whether or not you score highly in EI, rest assured, improvement is always possible.
Helen Parker, B.Psych (Hons), MBA and Wayne Lear, CFP, SSA is principal of Conscious Money. This article was first published in Financial Planning magazine in September 2011.
For more information about the Emotional Intelligence workshop, click here.