Enhancing Your EQ

‘People care about their problems. Not your solutions. They don’t care what you know until they know how much you care.’ - Carl Richards

Empathy, or the ability to sense other people’s emotions, is a must must-have trait to become an effective financial planner. Since financial planning is primarily a relationship business that involves dealing with people, the better you can understand why people feel, act, and do what they do, the more successful you will be.

For the most part, planners are aware and understand this because virtually every firm owner and new planner candidate I interview all state they have high levels of empathy. Yet based on how they interact with me, I can tell that not all of them do!

In this month’s article, we are going to look at what characteristics make some planners more natural empathizers, and resources for others who are seeking to further develop their empathy.

There are three main types of empathy, Cognitive, Emotional, and Compassionate.

Cognitive empathy means putting yourself into someone else’s place and their perspective.

Emotional Empathy means when you feel the other person’s emotions alongside them, like you have their emotions.

Compassionate Empathy is described as feeling someone’s pain and acting to help. This is where financial planners can add a lot of value to the clients they serve.

Daniel Goleman, one of the leading Psychologists studying empathy and other Emotional Intelligence areas (EQ), describes the elements of empathy as:

Understanding others
1. How you do this – Listen well. Plus be hyper aware of verbal and non-verbal cues such as hand and eye movements, tone and pitch of voice, and facial expressions, as to what they might be revealing about the other person. For example, when someone looks up and to the left, they are recalling a memory. Overall, strive for sensitivity and overall caring for others.
2. How you improve – Consider investing in training programs geared towards helping financial planners improve their empathy, such as Money Quotient, Sudden Money, and/or Kinder Institute. The consensus feedback for these programs from within the profession is very favorable. I went through the Money Quotient training late last year, and can vouch for the validity of the methods and effectiveness of the tools and resources they provide in creating deeper more meaningful relationships.
Developing others
1. How you do this – Having a mindset of, ‘I am going to get this person to where they want to go, and will pour everything I have in them to do so.’ Firm owners who take this approach are better positioned to attract the top new financial planning talent since they are seeking training and mentorship.
2. How you improve – Read The Heart of Mentoring by David Stoddard. Volunteer for a board position with FPA, NAPFA, and attend the leadership trainings these associations offer.
Having a Service Orientation
1. How you do this - Act as a fiduciary! Always looking for ways to put the needs of your clients ahead of your own. Going out of your way to help someone when it is likely you will not be recognized for it. And remember, this isn’t just about clients; it applies internally for your firm as well. Put your team members’ needs ahead of yours as well. This is a differentiator in attracting recruits. If this is part of you culture, when a potential new hire is speaking to a current team member, the team member will highlight examples, of how you put their needs ahead of yours, almost every time. Watch Simon Sinek’s “Why Leaders Eat Last” YouTube Talk
2. How you improve – On an ongoing basis, analyze your current service standards and re-evaluate how you could offer more and/or complete it in a shorter time frame. Read Raving Fans by Ken Blanchard.
Leveraging Diversity
1. How you do this – See diversity as an opportunity to gain new and different perspectives, not just an additional hurdle.
2. How you improve – Spend time with people that are different than you. This will assist in breaking down stereotypes. Consider working with clients and hiring employees who don’t look like you. Get involved with the new CFP Board’s Diversity initiative, and check out Ben Watson’s Book Under Our Skin
Political Awareness
1. How you do this – Understanding and responding to an organization’s power players. For example, sensing the gatekeepers that often protect decision makers. Also, noticing how and when to approach people to get something done while navigating hidden agendas. Strive for developing win-win solutions.
2. How you improve – Use your understanding others’ skills to help you gauge the risk/reward in terms of expending valuable ‘political capital’ in an efficient manner. This is something I have seen newer planners struggle with when joining other firms. Take your time, get to know everyone, learn how it works before moving with your agenda which could be a negative disruption.

This comes easily for some planners, so do not get discouraged if you know your empathy level is lacking. Because even though the starting point for empathy is set by genetics and early childhood development, it can be improved with discipline, practice, and time. Also realize that if the “touchy feely emotional stuff” is not your forte, you can look to hire someone or partner with someone with these complementary skillsets.

Fortunately, robo advisors are never going to be able to show their clients empathy, which is a key competitive advantage and should be a motivator if the recent trend is concerning to you.

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