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Financial Advisors Need These Three Qualities

Professional excellence, empathy and business mindset will continue long into the future as a must-have for advisors.

Financial advisors rarely get enough credit when things are going well, but often find themselves becoming a whipping post when times get tough. Although this thankless attitude is nothing new, there are some advisors who seem immune to these attitudinal vagaries. 

In our two-decade study of financial advisors and their affluent clients, we’ve compiled data during the best and worst of times. We know how the best advisors, which we refer to as elite advisors, work with their clients in good times and bad, in contrast to the general population of advisors. We also know what affluent clients want in a relationship with a financial advisor. 

All of this has led to the discovery of three timeless qualities (they have other qualities that make them elite) that are personified by elite advisors.

1. Professional Excellence 

The best financial advisors have an ever-expanding depth and breadth of industry knowledge that enables them to understand and address the ever-changing complexities of the financial world. It’s this high level of expertise that enables elite advisors to protect clients from themselves and the financial industry in general. Not only are they well-educated and credentialed, they are life-long learners. School’s never out for these consummate professionals.

They educate their clients about what’s happening in the world of finances, the impact it might have, and proffer financial advice accordingly. Another aspect of their professionalism is their ability to simplify complexity into a narrative that clients understand.     

Professional excellence goes beyond industry knowledge, elite advisors also understand today’s affluent client. For instance, they know the importance of good service, but they also recognize the importance of personalizing service to each client.        

2. Empathy  

The best advisors develop strong relationships with their clients because they truly care about them. It’s this level of caring that enables them to put themselves in their client’s shoes, essentially seeing the world through their eyes. This is what allows elite advisors to address potential fears and prevent panic in tough markets, manage exuberance in bull markets, and provide emotional support for family issues that arise outside the direct purview of investments. They are able to relate to their clients.

Today’s affluent have become more jaded, more cynical, more skeptical than at any time in recent history, all of which makes this quality more significant. Empathy is the polar opposite of the slick value proposition, the grandiose claims or the marketing hype. It’s a quality that engenders a level of trust that must be earned through one’s actions. 

As an aside, the best salespeople have a high degree of empathy.

3. Business Mindset 

This third quality of top advisors is a tricky one. Why? Because from the minute a new advisor begins their training, the idea that they’re entrepreneurs developing a business is planted in their mind. However, the majority of advisors have their office, technology and support staff supplied by their firm. Over a period of time, the typical career advisor has not developed a business mindset.

What’s a business mindset? It’s willingness to operate your practice like a business: paying close attention to finances, periodically conducting some form of “net profit cost analysis” for each client. Regardless of who’s paying for your support personnel, it’s important that each person is productive

A business mindset also means investing in your business. It’s been our experience that elite advisors have always invested in their business, from the beginning days when they had very little money to their current elite status where money isn’t an issue. In their early years, these were the advisors who hired an assistant before buying a new car. It was well before their firm was willing to pick up the tab. Like true budding entrepreneurs, in the beginning days these future elite advisors lived below their means as all extra resources were used to invest in their business. 

This business mindset becomes ingrained and is found in elite advisors whether they’re at a major firm or they’ve established their own RIA. And this goes beyond simply investing in their business, it requires the discipline to operate, day-to-day, like a business. This involves having policies and procedures for everything. There is no “winging it”—nothing is left to chance. There is a consistent client experience, team members are held accountable, performance reviews are standard and these elite advisors lead by example.      

Nothing here is revolutionary. To the contrary, what’s most impressed me is the timeless nature of these three qualities. Unless I’m missing something, professional excellence, empathy and business mindset will continue long into the future as must-have qualities of financial advisors. 

Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing, and Retaining Affluent


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