Financial Planning

Emotional intelligence: An investment with guaranteed returns

29 November 2018

Anthony Laye

Anthony Laye is a human behaviour expert, mentalist and speaker. Whether its leadership, negotiation, sales or team building, Anthony provides the tools to think, act and behave the way influential leaders do.

To stand out in this competitive profession, you must be able to connect with your current and potential clients on an emotional level.

Cam and Sarah are like most couples in their early 40s. They have two children, 11-year-old Tyler and eight-year-old Jess. They live in a four bedroom house in North Sydney, which over the last few years, has sometimes been a struggle to make the mortgage payments, especially as Cam, up until recently, has been the sole earner for the family.

Cam has his own carpentry business and works long hours. He is a very proud man and is careful with what he spends money on. He knows that employing three carpenters means cashflow plays a big role in keeping the business going.

Recently, Sarah has gone back to work as a fitness instructor. She regularly brings in an extra $500 a week. Cam and Sarah are now, for the first time since the kids were born, in a position where they have surplus income. They start to talk in the evening about how to best use this extra money. They know that if they’re not sensible, it will end up disappearing and they will have nothing to show.

They spend the next couple of weeks dreaming of how life will be when they become financially free; the memories they will be able to create for their children; the smiles they will have when they take that dream holiday to Tahiti; the peace of mind they will feel when they make that final payment on their mortgage.

Although careful with money, Cam and Sarah know that in order to make their dreams a reality, they will need to find an expert to help them; someone who knows how to take their money and put it to work.

They ask a few friends for recommendations. Cam starts to read a few books about financial mastery, what to look for and what to avoid when dealing with a financial planner. Sarah spends her evenings on Google trying to navigate her way through what seems like a financial minefield.

They start to feel deflated, then one day, during a sunny Sunday morning breakfast overlooking Sydney Harbour, they just happen to bump into Mark.

It’s time to listen

Mark is 53 years old. He has been a financial planner for 15 years. In that time, he has managed to create a strong list of 137 clients. Mark is your typical financial planner – rational, logical and likes to analyse everything.

As a financial planner, Mark has been very successful. Not only has he managed to retain nearly all of his clients, but his client list grows steadily every year and 80 per cent of his new clients are through referrals.

Mark knows that as a financial planner, he is no more knowledgable than the next, but what Mark does understand is that when dealing with clients, you are not dealing with logical beings; you are dealing with people who make decisions based on emotions.

Mark can’t help but overhear Cam and Sarah discussing what they should do. Finding a financial planner is proving to be a very uncertain task. They start thinking that maybe, they should just put all their money into a high interest savings account.

Mark introduces himself and uncorks his secret sauce. Over the next 30 minutes, Mark asks them questions. He finds out what their current problems are and what these problems are costing them. He asks them to share their dreams and goals, and how they imagine their life in five, 10 and 15 years time, including what they want to do when they become financially free and what that means for them.

For 30 minutes, Cam and Sarah talk from the heart, and for 30 minutes, Mark asks questions and listens. At no point does Mark offer any advice or solution.

Up until this sunny Sunday morning, no one has taken the time to listen to Cam and Sarah. Instead, Cam and Sarah have been presented with data sheets, brochures, percentages and timelines – information with zero emotional value.

Mark pauses. He looks first at Cam, then Sarah and says: “Imagine if 15 years from now, you were sitting having breakfast with your two children. Tyler is now a doctor, after you were able to put him through university, and Jess is just finishing off her business degree. You’re all laughing and sharing stories about the time you all went to Tahiti, and you’re celebrating paying off the mortgage on your second investment property.

“Although still a few years from retirement, you are already financially free, and Sarah, as you turn and look at Cam, you see a smile, a smile of genuine happiness, a smile that lets you know you made the right choices. Sarah, if you could make that vision a reality, when would you want to get started?”

Four days later, Cam and Sarah are looking back across Sydney Harbour. This time with a sense of certainty. They now feel positive about what’s around the corner. They feel as if they have been heard, validated and on a pathway to their goals and dreams. As the Manly ferry passes in front of them, Mark places down the final document to be signed.

The moral of the story

Many financial planners are very rational, analytical people who think logically. What’s important to realise is that many client decisions are based upon emotion.

To stand out in this competitive profession, you must to be able to connect with your current and potential clients on an emotional level. While facts and figures may be exciting for you, to the average person, this is not enough. It’s like giving a client a maths puzzle to solve, and if they can’t figure it out, they will just become irritated, and that irritation will be targeted at you.

In order to be a successful financial planner, you must invest in your emotional intelligence and people skills. These are the skills that you were not taught in school or university; yet it’s these skills that will allow you to create trust, build rapport and understand your clients on an emotional level.

As a financial planner, people are looking to you for advice about what to do with their money that they have worked very hard to get. And don’t forget, humans are constantly working on a survival mindset. Most people will put more effort in avoid losing $100 than they will in making $100.

So, while you may know the right strategy and plan of attack that will best suit your client, if you have not spent the time creating an emotional bond, so there is trust from the client that you won’t lose their money, you can forget about putting your academic skills to work.

So, ask yourself: Do you spend the time listening to your clients’ dreams and goals? Do you know why they have those goals? And what can you do right now to create a stronger emotional bond with your clients?