What’s your ‘EQ’? Soft skill can put you in big leagues as an advisor

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Being able to identify and manage your own emotions is important to success in any workplace. But it’s crucial to working with high-net-worth individuals and families, experts say.

The ability to perceive, understand and empathize with others is also part of one’s EQ, which is shorthand for emotional intelligence. (EQ actually stands for emotional quotient.)

In relationships and the workplace, data shows EQ translates into success, says Moira Somers, a clinical psychologist, professor, executive coach and a pioneer in the emerging field of financial psychology. She is also principal at the Winnipeg-based Money, Mind and Meaning consultation service.

“If you can’t accurately read people, if you don’t know how to settle yourself down when you’re upset or activated in some way, or if you keep plowing through when somebody is clearly not emotionally ready to be doing something, then you come across as kind of clueless and ham-fisted and insensitive,” she says.

EQ is needed for working with people in general, she says, including as a financial advisor.

“Technical knowledge as an advisor needs to be matched with skill in the personal aspects of advising,” Somers says. “It’s one thing to tell people that they need to get their succession plan in place, but it’s another thing to be able to ask people sensitively and skillfully what has kept them from getting that succession plan in place. And to skillfully move them further along in their journey.”

Financial and family issues provoke strong emotions, and money acts as a magnifier, Somers says. “It’s important that you have the skills, first and foremost, to get yourself in a place where you can be of good service and then to be able to show up for your clients in the way that they need you to.”

The good news is that emotional intelligence can be learned. While some people are more naturally inclined, it is possible to learn more effective EQ skills.

That's the future of where financial advising is going, is to have this blend of counseling skills with financial skills.

Jim Grubman, clinical psychologist, family wealth consultant and author

Several assessment tools are available, and coaching is one way to hone those skills, she says. Within a family office, feedback is important and there are specific training programs for emotional intelligence, she adds.

High-net-worth people often have to develop these skills at a greater level because there may be a greater interdependence on family members and a need to make decisions together, Somers says.

“Most of us, if we don’t get along with our brother, well, that’s just fine because we can be civil during Christmas dinner but it really doesn’t affect our lives in a profound way,” she says. “But in ultra-high-net-worth families, these skills of interdependence are much more strongly called upon.

“They have to develop skills within the family of being able to be tender but assertive; of learning how to tolerate tension while they work toward resolving conflict. You just can’t walk away from it in the way that you can when you’re not running a family business together.”

Emotional intelligence is about trust, says Evan Thompson, a certified life coach and communication coach at Toronto-based Evan Thompson and Associates.

Successful advisors build trust with clients, and the first step is active listening, he says.

“A lot of financial advisors stick to the finances. But the finances, while important, can often be an adjunct or an afterthought when the key is to get to understand the client by asking questions, not judging, offering to spend time with them and helping them with a life plan. Being a little more holistic in your approach, rather than just talking about, well, ‘Let’s see your assets.’”

Emotional intelligence means understanding the goals, comfort level with wealth, background, dreams and persona of a client, he says.

“Get them talking about their dreams and their aspirations,” he says. “This can be extremely difficult for families who have long relied on the matriarch and the patriarch to make the call to decide what’s going to happen to the family enterprise or what will be the legacy that’s going to be left.”

A lack communication can lead to “emotional mayhem,” he says.

“When people stay quiet, resentment builds, and then all of a sudden, at the worst possible moment, there’s this eruption of emotion,” Thompson says. “If [the advisor] doesn’t have a very accurate picture of the vision and goals of the family, they run the risk of moving too quickly.”

Clinical psychologist Jim Grubman is a family wealth consultant based in Boston and author of Strangers in Paradise: How Families Adapt to Wealth Across Generations. He is also a former academic director for the family legacy and wealth programs at the John Molson Executive Centre of Concordia University in Montreal and a similar program at Queen’s University in Kingston.

Over the past 15 years, Grubman has built a database of the results of EQ assessments in the financial planning field. He says it has become clear that communication skills and empathic listening skills are important to helping people with the issues of money and wealth.

Financial advisors range from average EQ to therapist level, he says, and it’s not necessarily therapist-level they need. There is a “sweet spot,” wherein advisors are aware of personal and family dynamics but have a balance of EQ and financial skills, he says.

If they aren’t careful, those with the highest level of emotional intelligence can become enmeshed in family and psychological issues, he says.

“They often are more interested in the family issues than the financial issues and may get drawn into addressing those with clients so much that sometimes it causes problems,” he says. “The ones that have a good balance of financial skills and relational skills tend to know their limits a little better. They tend to help people with better balance, they get in trouble less and if the issues become too intense, they are wise enough to know when to refer out to a therapist.”

There is debate over whether emotional intelligence is innate or developed in childhood, or can be developed later in life, Grubman says.

In any case, training can help those who have EQ but perhaps have not learned how to use it well in their work, he says.

There is a growing recognition within the financial industry that these skills are important, but few programs incorporate psychology, he says. It is his goal to see it become the norm.

“That’s the future of where financial advising is going, is to have this blend of counseling skills with financial skills,” he says. “I would encourage all advisors to seek out readings and resources and trainings in emotional intelligence, because these are basically skills that you can use not only in your professional life, but your personal life.”

More from Canadian Family Offices:

• Why UHNW and family office investors are delving into private debt
• How to equip kids with healthy attitude toward money, a step-by-step guide
• Five smart ways to transfer wealth to your children, grandchildren
• Family moving abroad? Buying property? Beware local tax laws
• What better expert in family offices than someone who custom-designs them?

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