I’ve worked with Financial Advisors on a daily basis for more than 20 years. Doing so has allowed me to make some observations about the personality traits and behavioral patterns that I’ve seen in those who are most effective in their professional lives. Not all advisors demonstrate every one of these characteristics, but most of the highly successful people I’ve been privileged to work with exhibit at least several.
The characteristics cross age groups, as the younger advisors who seem to have “the right stuff” demonstrate the same traits. Since these characteristics have been a pretty reliable indicator of future success in the financial-services industry, I am sharing them with you. I’ve listed them in no particular order. In most cases, the value of each trait for the work of the Financial Advisor is obvious. All of these characteristics or behaviors are well worth cultivating. I like to think of them as the core values or commitments of the highly effective advisor.
1. A Commitment to Insatiable Curiosity
Highly effective advisors want to know as much as they can about people and things. They are insatiably curious about the mechanisms of the markets, historical patterns and emerging trends. What’s important is that they are not information junkies for information’s sake; rather, they seek to understand complex processes so that they can put the information to practical use.
My “people and things” comment deserves a closer look. The most effective advisors we work with consider themselves not only navigators of the capital markets but (at least) amateur psychologists. These advisors’ curiosity drives them to look at human behavior critically and to read extensively in the areas of behavioral finance and behavioral psychology. Uniquely effective advisors are fascinated with the complexity of things. They know that they cannot fully understand or predict markets or human behavior, but they are compelled to learn as much as they can and to do the best they can with what they have.
2. A Commitment to Relationship Skills
Many effective advisors have also developed superior interpersonal skills. Uniquely successful advisors have cultivated the ability to “go deep” in conversations with others. They build rapport naturally and quickly, and pride themselves on being likable. One of the traits I see in these advisors is their tendency to learn important information about people and to remember it. Successful advisors remember peoples’ names and even the names of the family members who are important to the people they met (even if they haven’t met those other people).
I’ve described this trait elsewhere as the ability to relate in 3-D—that is, to see each person as a unique individual with hopes and dreams, fears and concerns. Interestingly, one of the traits we see commonly in less successful advisors is a kind of selective attention to the personhood of others. Less successful advisors know the names and important information of their most important clients, but don’t have a firm grasp of the human complexity of many of their “B-level” and “C-level” clients. Highly effective advisors seem to make it a habit to be fascinated by important details about every person they meet and work with.
3. A Commitment to Focus
One of the traits that allows for this heightened sense of awareness about others is a preference to build a few deep and productive relationships rather than a large number of shallow engagements. In a sense, effective advisors count on a few potentially highly productive opportunities rather than a greater number of more superficial relationships. This focus also allows for a much bigger impact on the people who become clients or big referral advocates. By sorting out the world of people into those who are worth the time, effort, and energy and then investing in high-quality connections, these advisors ensure their time is well spent.
This tendency to focus intensely on fewer, higher-quality relationships has gotten a tremendous amount of attention in recent years. To make a practice more manageable, advisors are coached to cull their practice down to 100 or fewer clients. This is seen as an important “best practice” in the industry, and it is. The best practitioners in the industry do this naturally and from the beginning. They build their business with this strategy rather developing it after coaching.
4. A Commitment to the Significance of History
Another trait that grows out of this intense focus on relationships is a sensitivity to how past patterns of behavior tend to repeat in the future. We frequently see uniquely successful advisors ask penetrating questions about what or how or why. For example, when meeting a potential referral advocate (an accountant or well-positioned business executive), these advisors will often ask, “Which Financial Advisors in the area do you think are particularly effective?”
This is a great question, since if the CPA can comment on one or two advisors whom she thinks are particularly talented, it is clear that she has had some experience with them and is probably inclined to refer. On the other hand, if the professional can’t recall the name of an advisor she thinks of highly, she most likely has not worked closely with one in the past. Successful advisors know that human beings are creatures of habit, and that we seldom change dramatically once we reach adulthood. As investors, we know that “past results do not guarantee future returns”; however, as psychologists, we understand that past patterns are a reliable predictor of future choices when it comes to how human beings behave.
5.A Commitment to Collaboration and Referrals
The great advisors I’ve worked with rely exclusively on referrals from existing clients and from other professional referral advocates. They know that financial services is a high-touch business, and that uniquely successful individuals and families don’t choose their advisor from a Google search or on the basis of a cold call. Instead these advisors build collaborative working relationships with the CPAs and attorneys whom their clients work with, and invest time nurturing those relationships as a way to provide value and show professional expertise.
6. A Commitment to Optimism About the Future
This is actually two commitments: one is the tendency to be more focused on the future than the past, and the other is the tendency to make pictures of the future that are attractive (hopeful) rather than frightening (pessimistic). Many of the advisors we work with who struggle to grow their practice or to push through plateaus create their own difficulties by doubting their future and clinging to their past. These advisors spend time hovering near the telephone, waiting for a client to call. They believe that answering by the second ring will somehow ensure that clients will be satisfied and never leave. These are the advisors who hold on to every client they’ve ever worked with “because you never know when someone might win the lottery.” In short, they don’t believe in their own ability to create positive future outcomes.
Great advisors see the future in positive terms and see themselves creating those terms by their actions. Of course, they invest time in providing a great standard of care to their clients, but they also believe that they haven’t met their biggest and most productive client yet. These advisors develop an outreach method, usually based on referrals from professionals, and periodically prune their practice of clients who are difficult to work with or who do not fit their emerging practice model.
7. A Commitment to the Courage to Advise
This is another two-sided commitment: one is the advisor’s belief that fear and negativity about future events undermines optimism and focus; the other is the advisor’s conviction that he owes it to his clients and referral advocates to have a well-considered point of view. These great advisors are willing to risk being wrong, both by having a thoughtful opinion and then by boldly sharing it with others. They know that clients are paying for advice, and that advising means much more than just providing a range of possible options for the client to consider. Instead they are willing to put a stake in the ground about what they believe is in the client’s best interest.
Most of these core values or commitments aren’t hard to develop. They may take some time to cultivate, but if you make a commitment to change and dispel fear of change, I believe that you too can become one of the highly effective advisors.