The key skills clients look for in a financial adviser are trust, communication skills, behavioural coaching, and technical knowledge, according to a recently published white paper by The Initiative for Financial Wellbeing (IFW).
The research explores how the technical competencies that all financial advisors must demonstrate can sometimes conflict with how clients want financial advice to be delivered. According to the research, the majority of professional training traditionally undertaken by advisers is focused on technical competencies rather than three of the four main competencies clients actively seek.
The IFW is eager to assist advisers who believe that more specialised training is required to truly recognise how a better understanding of key areas such as effective communication can result in significantly improved client outcomes. Trust, communication skills, behavioural coaching, and technical knowledge are the four key competencies.
Clients express a desire to be heard when discussing their goals and dreams, so trust and integrity are by far the most sought-after competencies. Communication skills, such as listening, are currently underrepresented in the services provided by advisers.
While technical knowledge is required, so is simplifying or eliminating jargon as well as not engaging clients in risky investments solely to generate fee income. Clients appear to be more at ease with a fixed fee amount because they know exactly how much their advice will cost.
Aegon chief marketing officer Andy Manson says: “While clients want expert advice from people qualified to support them to achieve their goals, the IFW’s paper highlights that financial advice is about much more than knowledge of tax rules or investments. The outcomes that advice enables, such as peace of mind, a concrete picture of our future selves and the ability to tackle life’s unexpected events, are driven to a large extent by the advisers understanding clients’ hopes and fears and then using their technical expertise to enable them. The paper identifies that skills such as active listening are more likely to be learned on the job rather than through formal training and their recommendation that advisers consider them as part of the choices they make about professional development is a good one.”
IFW CEO Nick Marsh says: “It is the IFW’s view that advisers should invest in their clients by expanding the client conversations far beyond investments and money. Helping clients identify their long-term goals and the tenets that contribute to financial wellbeing (namely the relationship between their money and their happiness) as part of effective communication, should be something for advisers to focus on to demonstrate the huge value that they can bring to their clients.”