The Covid-19 crisis has highlighted the importance of the so-called ‘soft skills’ of financial planners: empathy, communication skills, coaching, teamwork and relationship building, to name just a few.
Clients have turned to their financial planners not for “charts and wavy lines and ups and downs”, as one planner described it to us, but for deeply personal reassurance and a meaningful conversation about their concerns for their families and businesses.
New client enquiries have come from those who are seeking “someone who can get to know you emotionally and challenge you on things” another planner told us. “Lots of people have a brave front, but once you dig under the surface…” he continued.
The abrupt shift to remote working has also meant firms have needed to tighten their processes around collaboration, team working and communication in order to maintain their service levels and keep staff motivated and on track.
Of course, interpersonal skills and relationship building have always been core to good financial advice, as well as the ability to translate the complex into something clients can grasp and buy into. It is what enables an adviser to retain clients and be successful.
However the shift to financial planning, and the need to discuss the ‘why’ with clients as well as the ‘what’ have made these essential skills for all, and ones that are even more relevant in overwhelming and confusing times.
In the wider picture of how the industry is developing, it’s arguable that with more technology, data, research and AI tools coming to market, the ‘what’ and ‘how’ of financial planning will become a more automated process, and the ‘why’, and the communication of that with the client, becomes the real value-add.
All of which brings into question whether categorising these skills as ‘soft’ is the right term for something so business-critical. I recently read an article in Forbes magazine arguing skills such as communications and teamwork should not be considered fluffy, nice-to-have value-adds. They’re hard-won and rigorously maintained abilities that are better referred to as “power skills”.
That means more support from firms on training and mentoring in these skills. We spoke to a NextGen planner at the beginning of the year who described the “big shift” that is occurring in financial planning at the moment, “and we don’t know we’re seeing it.”
He continued: “the fee pressure, transparency with Mifid II. People are more educated and more confused than ever. They’re overwhelmed with options. It’s a perfect storm for financial planning firms that do the job correctly. The good firms are realising the need to bring people through in the right way with the right training.”
Recent research conducted by NextWealth in partnership with Fidelity FundsNetwork, revealed 97 per cent of financial planners think interpersonal skills are essential or important. The same percentage considers verbal communication skills of uppermost importance, placing technical knowledge as a third priority. And while the traditional competencies of maths and economics still top the chart for important qualifications for a successful financial planner, half of respondents thought a psychology degree would be a ‘nice to have’ for new industry entrants, reflecting the view that understanding clients’ behaviour and decision making is a valuable part of delivering a financial plan successfully.