Formal training for financial advisers has traditionally been technical, with any soft skills being up to the individual. It’s time that changed.
With the PFS having launched their apprenticeship programme, and the Simply Biz Adviser Academy and Old Mutual Adviser School expressing an interest in getting involved, now is the time to consider the soft skills elements of the apprenticeship programmes.
I would suggest the main two objectives must be:
For apprentices to understand the importance of interpersonal skills, and
To give sufficient knowledge so that apprentices are enthused to seek more learning outside of the programme
One of the most common questions on the NextGen Facebook page is along the lines of “Can anyone recommend more technical courses now that I’ve done all the CII exams.” The coaching aspect of financial planning needs to be a significant part of the training of young advisers.
Coaching For Financial Planners
One way of summarising these skills could be the question “Who is the most important person in the room?”. Although technical knowledge is important, it is to be used sparingly in the meeting room. The client is the most important person in the room, not the adviser, and the focus must be on them and them only.
Technical knowledge is to be used only when necessary or required by the client. In many cases, it is not needed with clients at all. Understanding this should be paramount in training young advisers.
Objective in using Interpersonal Skills
An effective and compliant financial plan needs:
to have real objectives
to demonstrate the ‘know your client’ requirement
Financial planning is very simple. Work out what you want from life, then spend your money on that.
The trouble is, working out what you want from life is not as easy as it might at first seem. For example, one thing we are not able to do is to challenge our own assumptions. To understand what we want from the future, we need a third party to challenge us. In this way advisers can really help the client, and have clear objectives at which to aim our financial planning.
So now let’s look at two points at which Interpersonal Skills are so essential.
Early meetings (inc fact finding/know your customer)
The first few meetings are about getting to know the client and building trust in order to gain real clarity over the life objectives, and therefore the financial objectives. In many (although not all) circumstances, it will also include an element of helping the client to understand themselves better.
Financial advisers should therefore have:
a clear intention to listen and observe
questioning skills. Not just open/closed, but good questions and bad questions (multiple questions in one, pre judging, and so on)
listening skills (is this the least trained area in the entire professional arena?!)
an understanding of when to coach and when not to coach
an understanding of what constitutes an objective
how to draw out hard facts during a discussion, and knowing which facts can be left to the post meeting email (aka why factfind questionnaires have no place in a client meeting)
Constructing a plan and delivering it to the client
The suitability letter needs to include clear objectives. Note that “You want to consolidate your pensions and take advantage of our model investment portfolios” is NOT an objective!
In constructing a plan and delivering it to the client, advisers need to have:
ability to link the technical knowledge to the client real needs and objectives
communication skills to not only get across complicated issues, but to make those issues relevant and real to clients
progress checking skills, to ensure that advisers do not bamboozle the clients with their knowledge
There is a misconception that advisers need to complete a factfind. This is not the rule. They need to demonstrate that they know their customer.
Information can be gained outside of a meeting room. The basic hard facts will come out in discussion, and the rest can be gained later by email or telephone call.
Awareness of this (for compliance departments as well as apprentices!) is key to helping the next generation of advisers understand that their technical knowledge is not the how the client gains most value.