Financial advisers learn a new language - plain English
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After the introduction of the Future of Financial Advice changes, financial advisers will need to use their soft skills to articulate the value of their advice. Chris Kennedy reports.
With all the focus these days on regulatory innovation and the need to make sure financial advisers have adequate technical knowledge, it’s easy to overlook the fact that this is just one aspect of delivering effective financial advice to clients.
The so-called ‘soft’ or client engagement skills – which some believe can really only be learned on the job or in a client-facing environment – are a major focus for licensees, particularly when dealing with new industry entrants rather than career changers who may have already gained these types of skills in other fields. It is also an increasing area of focus for educators.
AMP Horizons Academy’s Tim Steele says that soft skills education forms the core of the Horizons program, with just over half the initial intensive 10-week training period dedicated to such skills.
“The foundation we see as most critical to ensuring [financial advisers’] success and the value of advice that they deliver to clients is the ability to be able to engage efficiently with clients, build rapport, trust, and help clients to make decisions to improve their situation,” he says.
“We want to make sure they have the soft skills to understand clients’ needs. You can have people that are technically brilliant, but without the ability to effectively engage with clients they will always struggle.”
Soft skills education hasn’t traditionally been a huge focus for Kaplan Professional in its diploma and advanced diploma of financial planning courses, but Kaplan’s Marilyn Hill says the company has now expanded its business model to incorporate these skills by introducing a range of new programs in personal development, management and business.
Hill says the changes are driven by demand from licensee clients, who are increasingly seeking to complement technical instruction with training that focuses on developing the skills of client engagement, building client trust, running effective businesses – and generally developing the abilities of the financial advisers who work for them.
“There’s a clear trend of looking at the adviser holistically. It’s not just about the technical training but looking at the whole adviser package, and the way the adviser engages with clients and runs their business and their value proposition,” she says.
Hill says the increased emphasis on client engagement skills in the advanced diploma course doesn’t aim to replace on-the-job training and coaching.
However it should help entry-level financial advisers focus on the things they need to do to be effective, beyond having strong technical knowledge.
“Licensees have identified for us that in the professional development area these are the things that are of most concern to them in the changing advice environment,” she says.
Soft skills will become even more crucial under the proposed Future of Financial Advice changes, according to MLC's Zane Brown.
He says financial advisers will need to justify their own value proposition to clients and explain the need for clients to ‘opt in’ to advice services every two years.
“That changes the entire face of the type of conversations of some of our advisers, primarily when they’re having conversations with clients they might not have spoken to that often,” he says.
Association of Financial Advisers' (AFA) Adam Smith says many entrants coming through the AFA’s GenXt program have requested additional soft skills training and the means to know how to translate these into good outcomes for clients.
This is one aspect the AFA is looking to focus on through its new Campus AFA education initiative, which looks to provide more education solutions for financial advisers and licensees.
As a more recent industry entrant, Wealth Enhancers’ Finn Kelly identifies client-focused training as a real gap in the education pathway
“Clients need to trust you and they need to like you, because hopefully they’ll be spending a long time with you,” he says.
“Young planners can be so focused on getting the process right they don’t engage with the client. If the client doesn’t open up, it’s useless.”
Kelly believes the licensees should look to take more of a role in this, rather than the industry just leaving it up to the educators.
He is also a fan of having work placements linked to undergraduate degrees, which would not only be good for students but also open an avenue of recruitment, allowing employers to get a soft introduction to upcoming financial advisers before making the decision to hire them.
It is something that some universities, including Griffith, already incorporate.
Griffith University’s Dr Mark Brimble says there are three ways the university looks to address soft skills training:
- through a professional development program that runs alongside the degree and allows students to interact directly with the industry at events;
- through assessment strategies that incorporate role plays and presentations; and
- through a work experience or internship arrangement where students can work in a paraplanning capacity alongside practising planners. This allows them to get exposure to the financial planning process and build their skills while they’re still studying.
ipac has an internal program dedicated to soft skills training run by ipac head of advice development John Dani.
Dani says that there was a phase shortly following the 2002 introduction of the Financial Services Reform Act where significant emphasis was placed on compliance and regulation.
However, he says we are now seeing a shift towards a greater focus on soft skills and on the need to coach advisers to more deeply and effectively engage with clients.
Dani says this is particularly important in the current environment of increased uncertainty, with suspicion or cynicism generated through media coverage and consumer groups questioning the role of financial advisers.
He says regulatory changes are also drawing attention to and casting suspicion over role of financial planner, meaning interpersonal skills are more important than ever before.
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