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Converting a prospect into a full-fledged client is an accomplishment and given the difficulty associated with that endeavor, it certainly pays for advisors to know what prospects are looking prior to the first conversation. The answers might be surprising to some advisors.
Yes, a favorable fee structure, access to sophisticated investments and strong performance are among the factors that are impactful in the prospect-to-client conversion process. Important elements to be sure, but there’s more to the story and that includes emotional intelligence and the ability to convey trust. Those are what’s known as soft skills.
For advisors, the importance of emotional intelligence cannot be overstated, but the good news is that the concept is easy to understand.
“Emotional Intelligence (EI) is the ability to manage both your own emotions and understand the emotions of people around you. There are five key elements to EI: self-awareness, self-regulation, motivation, empathy, and social skills. People with high EI can identify how they are feeling, what those feelings mean, and how those emotions impact their behavior and in turn, other people,” according to Mental Health America.
Why EI Matters
The findings of a recent Million Dollar Round Table (MDRT) survey confirms the importance of EI. It goes hand-in-hand with building trust. For example, nearly 46% of respondents in the MDRT poll said an advisor that is a good listener and acknowledges the client’s needs is more likely to earn their trust.
Further cementing the importance of emotional intelligence is its links to communication skills. As noted above, listening is clearly part of the equation. So is advisor-initiated communication when the situation calls for it, or better yet, just because. More than 44% of those queried by MDRT said advisors enhance clients’ trust by following through on their word and/or conveying concepts and methodologies in an easy-to-understand manner.
There are important lessons in the above for advisors that have staff because they’re on the receiving end of EI or lack thereof, too.
“High EI overlaps with strong interpersonal skills, especially in the areas of conflict management and communication - crucial skills in the workplace,” adds Mental Health America. “Operating with empathy and understanding is a critical part of teamwork; being able to attribute someone’s behavior to an underlying emotion will help you manage relationships and make others feel heard.”
Other Emotional Components
The emotion component in emotional intelligence is important and for advisors that wonder why, consider what prospects are looking for an advisor. Hint: it doesn’t always boil down to portfolio management and total returns.
The MDRT survey indicates that more than 42% of those polled that don’t currently have an advisor would consider hiring one to help them feel less stressed about money. Another 39.4% said they have the expectation that an advisor would bring them some level of comfort during volatile market settings.
Interestingly, barely more than a third of those polled that have advisors believe their advisors are adept at managing emotions in personal interactions. That implies that advisors that can bolster their EI skills could get a leg up on competitors.
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