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What are soft skills and why do advisers need them?

This article is part of
Guide to adviser soft skills

What are soft skills and why do advisers need them?

First impressions count, as the saying goes, but so too do second and third impressions when it comes to an adviser's relationship with their clients.

Approaching a financial adviser for the first time, potential clients are likely to want to know they have the correct qualifications.

But perhaps what many people don’t realise is how much they will also be relying on the adviser’s soft skillset to help guide them through their financial choices.

Advisers may not even be aware, at times, they are using these soft skills in their contact with clients.

That’s because soft skills are to do with emotional intelligence – most of us draw upon these in everyday conversations to some extent. 

But an adviser will need to bring these skills to bear in every client meeting.

Darren Smith, head of the Financial Adviser School, observes: “Financial advisers have a unique skill set and need to have a huge depth of knowledge and technical ability. This is crucially important to their career. 

“However, of equal importance are soft skills. Soft skills are around interpersonal skill development and focus on communication and emotional intelligence.”

Tom Hegarty, managing director at New Model Business Academy, points out soft skills are just one of the many talents advisers need.

“There’s the technical knowledge, there’s the conduct and ethics and the regulatory side, there’s [the ability to] run a business but most advisers would actually say, most importantly, is interpersonal skills because all of these things are developing relationships over the long term with clients – building trust,” he says.

Mr Hegarty notes many in the financial advice industry will already possess such skills. “They probably know that they’re quite good with people, which is why they chose the profession,” he adds.

Making it a priority

With so many calls on their time, why are these types of skills so important for advisers? As Mr Smith points out: “Advice in any form, not just financial, is a form of counselling.

“It’s about listening to a person’s story and aspirations and giving them a well-considered view on how to proceed. The whole interaction is one that is predicated on listening carefully and using your emotional and intellectual intelligence to give someone your best recommendation.”

Philip Hanley, director and independent financial adviser at Philip James Financial Services, recognises the importance of soft skills and asserts that establishing a relationship of trust between adviser and client is more important than ever.

He acknowledges: “As advisers, of course we need technical, business and financial skills. But we deal in intangibles – investments and pensions are no more than computer entries these days.

“Just as most interviewees win or lose a job in the first two minutes so, I think, most clients decide if you're OK or not just as quickly.”