If advisors want to earn the trust of clients, they will need to brush up on their emotional intelligence, especially in these times of historic turmoil, according to a report by the Harris Poll on behalf of the Million Dollar Round Table.
The study, conducted in February and including 2,013 U.S. adults, found that being financially literate is just not enough for advisors to gain clients’ trust. Eighty-five percent of Americans said they would be more likely to trust recommendations from advisors who demonstrate emotional intelligence. The respondents saw this quality as important to building a good client relationship, the report said.
Specifically, the study found that Americans would be more likely to trust advice from advisors who listen to and acknowledge their clients’ needs (cited by 57% of the respondents); communicate in easily understood ways (also cited by 57%); follow through on their word (cited by 55%); and show they care about their clients as people (cited by 52%).
In contrast, 30% of Americans said they would be more likely to trust the advice of advisors who are digitally literate and have up-to-date websites, and 25% said the same for advisors who regularly recommend relevant content.
Regina Bedoya, president of the Million Dollar Round Table, said the societal disruption caused by the coronavirus has made it even more important for advisors to connect with clients on more personal levels. “Advisors can successfully adjust and help clients navigate this new reality by embracing the sentimental side of financial advising,” she said in a statement.
While most Americans with advisors give them high marks for having strong emotional intelligence, only 32% said their advisor can resolve conflicts, and only 40% said their advisor is disciplined in managing the clients’ emotional reactions during discussions.
Sixty-one percent of baby boomers (born from 1947 to 1965) and 62% of Gen Z (born from 1998 to 2012) indicated they would be more likely to trust advisors who listen to and acknowledge their needs. Fifty-four percent of millennials (born from 1982 to 1997) said so while 52% of Generation X (born from 1966 to 1981) said this.
Nearly half of boomers (47%) and Gen Z (49%) said they would be more likely to trust advisors who check in with their clients frequently, compared with 39% of Gen X and 36% of millennials. Similarly, 39% of boomers and 40% of Gen Z said they would more likely find an advisor trustworthy if he or she tailored financial plans to economic cycles and policy trends; only 28% of Gen Xers and 24% of millennials felt that way.
Founded in 1927, the Million Dollar Round Table is a global, independent association of more than 72,000 life insurance and financial services professionals from more than 500 companies in 70 nations and territories.