Advisors usually take lots of finance courses in college to prepare for their careers, but there are lots of non-financial subjects that also come in handy, especially when it comes to handling clients.
Not surprisingly, perhaps, many financial advisors says psychology and sociology are subject areas that pay dividends throughout their careers.
“Any course I took that pertained to human behavior has helped me in my career,” said Matt Miller, vice president at Helios Quantitative Research in Tucson, Ariz. In fact, he went back to school to get a master’s degree in psychology “specifically because I wanted to better understand client behavior that was in opposition to their best interest.”
“I think understanding how the brain takes in information is vitally important to our industry and for clients,” he said. “We are emotional beings first and logical second. By understanding this concept, advisors can help their clients understand that emotion and financial decisions can be like oil and water. They often don’t mix. Removing emotions from the equation will help both advisors and clients achieve better results.”
David Zavarelli, a CFP in Danbury, Conn., said sociology, statistics and economic, were among the most valuable courses he took in college.
“Sociology taught me to have a better understanding of how groups may think and act, especially as it relates to money or investments,” he said. “How and where people grow up can have a significant impact on how they manage their finances. For example, children of Depression-era parents can often be more conservative than they need to or should be because of the struggles they witnessed or heard about as children. People from developing countries may fear institutions based on volatile or poorly regulated markets in their home countries. Clients who grew up in war-torn countries may be challenged to think longterm because they witnessed people who did and lost everything. These experiences can shape a group and be passed down the generations.”
Indeed, history also plays an important role in shaping the way people think and react to situations, both their own and society’s at large.
Matt Etter, president and owner of Signet Financial Management in Parsippany, N.J., was a history major. “That helps in being able to explain markets to people and show them not to make the same mistakes over and over again,” he said. “You try to relate that to the client. It’s when they get stressed or panicked or become emotional that they make mistakes.”
“What made me into a sophisticated investor was the understanding that markets don't ever change—their patterns keep repeating themselves,” said Terry Eisert, founder and owner of Eisert Wealth Management in Cincinnati. “This is true because human nature never changes. I use these understandings in my technical analysis and chart reading. So for me, definitely psychology and history courses were helpful.”
But liberal arts also can play a big role in shaping the well-rounded financial advisor.
“I spend the bulk of my days communicating with my clients and my team,” said Larry Miles, principal at AdvicePeriod, a Los Angeles-based wealth management firm. “The reading, writing and critical thinking I learned in my English literature classes are by far the most valuable skills I have.”