What are the qualities that investors look for in an adviser? A whitepaper by published by Association of Financial Advisers (AFA) says that advisers need to master three key areas that matter most to clients:
- Adviser Qualities- The skills, confidence, capability and engagement of the adviser. Trust between an adviser and a client is vital. A client’s trust in an adviser develops through their experience of the adviser’s skills and abilities and the results they produce, as well as the qualities and attributes related to the character of the individual. As the relationship matures, trust grows as a result of the technical competence of the adviser and his ability to deliver quality advice and positive outcomes for the client.
- Practice Service Proposition- Ability of the practice to deliver the client experience.
- The Advice Process- Ability to understand client needs, goals and dreams and then create a plan to achieve this
In the words of one client surveyed by Association of Financial Advisers, “Trust is about caring, understanding, listening and explaining what is required.”
Rajesh Koradia of Save and Smile had earlier told Cafemutual, “I learned the value of trust from my very first client. When I had asked him what convinced him to invest through me and that too in an instrument which he did not know very well. He said that experience has taught him to judge a person by his actions, and he felt that I would not be reckless with his money. I realised that trust is an important factor and building trust is the basic ingredient for business. Another thing which I realised was that people first trust the advisor and then the product.”
The benefits of being a trusted adviser
The report states that trusted advisers perform significantly better across key business metrics:
- High client advocacy
- Better prospect conversion
- More involvement in their client’s personal and financial affairs
- The delivery of improved financial outcomes and real value to their clients
- Highly satisfied clients
- Clients that are willing to pay fees
- Strong and enduring relationships with their clients
The pathway to becoming a trusted adviser
There are two key ingredients of a trusted adviser:
- Technical skills and
- Strong interpersonal skills and emotional intelligence
Advisers need to build capabilities in both these areas to become a ‘trusted adviser’.
Technical skills are a basic expectation that all clients expect from their advisers. Such advisers are rated highly by their clients on their qualifications and experience, their technical ability and importantly on instilling trust, all of which are areas that are under constant evaluation by clients.
Technical competence, however, is clearly seen by most clients as a hygiene factor and the attributes that differentiate leading advisers in the eyes of clients are actually the interpersonal skills and emotional intelligence that complement the adviser’s technical skills. Developing skills in this area provides a clear pathway to becoming a trusted adviser.
Emotional intelligence improves an individual’s interpersonal skills and social effectiveness. The higher an individual’s emotional intelligence, the better they are at establishing positive social relationships with others. This is particularly important in certain professions, including the financial advice profession, which are based on social interactions and relationships.
Technical skills are typically easy to observe, quantify and measure and are the primary target of most training organisations. In contrast, interpersonal skills and emotional intelligence are harder to teach but can also be effectively learned and developed with the appropriate training. Importantly, while some advisers are naturally gifted with good interpersonal skills and high levels of emotional intelligence, even the most trusted advisers have, at times, had to work hard to acquire new skills in this area that have not come naturally.
“Honesty and winning the trust of clients makes financial advisory business successful. The intent of the adviser should be visible. I have never used newsletters or advertisements to market my business. It is only on the basis of the word-of-mouth publicity that helped me grew this business,” believes Vinod Jain of Jain Investments.
The whitepaper was based on the feedback of 13 financial advisers in Australia who were winners of adviser of the year award in the country. A client experience survey was also conducted among the clients of the winners as well those who were not involved in the award process to analyse and compare client feedback.
