Advisors Keep Missing Client Cues. How More Self Awareness Can Help.

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Financial advisors generally have high IQs. However, many fall short when it comes to EQ, and according to our next guest, advisors today need to have both in order to succeed. Beverly Flaxington is co-founder of The Collaborative, a professional development consulting firm in Massachusetts. She's also an author, college professor, speaker, trainer, business consultant, entrepreneur, behavioral expert, and certified hypnotherapist. Her bestselling books include The Pocket Guide Guide to Sales for Financial Advisors and Understanding Other People, and she has two patents on succession planning for financial advisors and has developed programs for most of the major custodians and a number of large asset management firms. I'm Greg Bartolis, editor-in-chief of Barron's Wealth and Asset Management Group and nearly out of breath. Beverly, welcome.

Thank you so much, Greg. I'm really happy to be here today.

So thank you so much for joining us. I wanted to ask, you know, what's What's the importance of EQ to advisors? I mean, we hear so much about IQ and intelligence, it's almost a given, but why does EQ matter?

And I think that's an important place to start, which is that when we talk about EQ, we're not diminishing the importance of IQ in this business. One of the, I think, really exciting and interesting things about being in this business is it's very intellectual and people have a lot of background, schooling, learning. But if you don't partner it with EQ, which is an understanding of yourself, it's an understanding of how you come across, and it's absolutely an understanding and a social awareness of others, all of that great intellectual information that you've gathered, all of those years of studying and those credentials, Greg, are not going to be as much of high impact if you don't also have that people side of it, that understanding of self, and understanding of those around you.

Do you think advisors on balance appreciate the importance of EQ enough?

So that is a bit of a loaded question. I've been talking about this as long as I can remember. I do think, and I am heartened by the fact that the industry is starting to see the importance of it. I've actually seen a couple of research studies that have been done on the importance of EQ and how you really cannot separate IQ and EQ. But I think generally there is still a bit of an aversion to think about this as soft skills. And so the technical piece, I think, is still so highly valued that there's this hesitancy to look at something that on the face of it seems like it's so obvious and so quote unquote soft that I think that some advisors are hesitant to embrace it as something that actually has power and has impact.

I mean, is that coming from a sense of that it's not important because it's not quantifiable, or is it more than that?

That's a good— yeah, that's a good insight. I mean, we are in a business that is all about do the numbers foot and what's in the Excel spreadsheet. So I think that's some of it. I also think, Greg, that in fairness, there's an aspect where, you know, you're asking someone to do a lot of self-reflection. EQ, the number one thing that you start with is that self-awareness. And so sometimes just from a human perspective, if I don't wanna do that and I haven't done it, I might be a little bit concerned about what that's going to open up for me. So human nature, we're a little fearful sometimes if we're gonna be asked to confront something that maybe is not going to have the most positive outcome for us.

Can you share an example or two of an advisor with high EQ doing something right and maybe an example of someone with a tin ear not reading the room or reading someone's expression and potentially losing a client because of that?

Let's talk about it from a couple of different lenses. So high EQ, you're often going to see in a practice, a team, a firm where people feel confident and comfortable to be able to go to the senior advisor, share ideas, brainstorm, open up about things, and that advisor is not upset by feedback. That advisor does not see it as a negative reflection on the person, but rather is trying to cultivate an environment where people are open and it's a It's a team working together. Then you take that same team with high EQ, you put them in front of a client, and what you'll see are people who are working together clearly on behalf of the client. So they're listening with empathy. They are not just presenting all of what they can do. Let's say there's 3 people from that firm meeting with a client. They're not going to trip over one another in the way that they're presenting. Or not listen to what the colleague said and go off in another direction. They're going to present a unified front. They're going to put the focus on the client, clearly listening, and they're going to be organized as a team rather than as individuals who have come together and are trying to get somewhere. So that's how that would play out in a positive high EQ environment. I'm going to tell you that it's uncommon because what typically happens is that advisors will go into a meeting and because again, focus is on technical, focus is on what I want to present, focus is on making sure I'm showing you what I'm doing for you or what I can do for you, many times then that engagement becomes about the advisor, not about the client. So example of poor EQ that I've witnessed many times in my career is where the Advisor's not reading the client cues. They're not noticing that perhaps the client has not followed something that they're presenting or may be getting agitated about something or may be concerned about something or fearful. The advisor might just think all the answers lay in the data, right? They lay in the technical information and not stepping back to really look at some of the other interpersonal dynamics that are going on.

And to what extent, I mean, are, let's say, good listeners born, and to what extent can they cultivate the ability to listen more closely and sympathetically?

This is probably, Greg, one of my favorite topics because, as I like to say, there's few things that we do coming out of the womb that are more natural than listening. Even a baby that can't talk listens. And yet, so it's quite a natural process. Yet listening with empathy, practicing reflective listening rather than just having your list of questions that you want to ask, but truly allowing the prospect, the client, the team member to open and to share is a struggle. The reason that it is, is that especially in a cerebral business like the one we're in, People spend a lot of time, advisors spend a lot of time in their heads. I'm thinking about what I'd like to present next. I'm thinking about what you just said. I'm thinking about how much time is left in this meeting. So we're distracted. Advisors are distracted. We're generally distracted. The good news is that when you can identify that that's happening, you can then in fact put some steps in place to be able to modify it. But it really does take work. In a lot of workshops we do, when we bring up listening, I think of it again as such a simple topic, and yet it can oftentimes be the number one thing people will say brought to their attention that they really do need to work on. Advisors will admit, this is difficult for me. I care. I want to listen. But actually doing it is a little bit more challenging.

Yeah. I mean, it seems subtle, but it's in a way a profound distinction because the act of hearing is actually passive, right? You can lay in bed reading a magazine and you're passively hearing things, but to actually closely listen is an active process. And it makes a world of a difference in terms of recognizing your environment and responding accordingly.

One thing I would add to that, and I mean, you really nailed it. We talk a lot about the idea of reflective listening. Reflective listening is, I'm an advisor, you're my client, you've come in, I have an agenda, but you've got some things you want to talk about. And it's how strong is my ability to be able to reflect back to you what I've heard from your seat. And Greg, it's always surprising to me how very challenging that is for advisors, even when we might do it, say, in a simulated environment where they know that's what they're expected to do. So, and so I think you've really nailed it. It's, it's, we are, we are hearing the words, but are we listening, processing, and connecting the pieces in order to be able to show our prospect, our client, that I really did hear you and I understand you? That's the essence of reflective listening, right? I get it. Right.

And just even without advancing the ball immediately, just by recognizing and putting a mirror to what they're saying and saying, let me just get this right. You're saying ABC. If you get that right, I assume that can only provide benefits to the advisor. I mean, it shows you're listening, and it's got to get the ball rolling to a more productive outcome, I'd imagine.

Well, think about— so this goes back to where we started and you asked the question about, you know, are advisors embracing this idea of EQ? Do they focus on it? You know, I like to point out that when you start implementing some of the things that EQ talks about, you become more self-aware, you become more self-regulated in the way you express yourself. You have social awareness. So you are listening, you're engaging. The crazy thing about it is that for the advisor, it makes their job so much easier. And that's what we really try to underscore because the level of engagement, the level of understanding, the level of connection that you're able to get to with someone is so much deeper than if you're not applying some of those practices.

Would it be fair, and this may be an oversimplification, but to some extent, as like a shorthand reminder, could it be distilled to kind of live in the present, be in the moment, just kind of shut out all your daydreaming, don't look out the window, just focus like a laser on this person, listen, just be in the moment? I mean, that may be an oversimplification, I don't know, but—

You know, it isn't, and it's interesting. We really like some of the work that was done by a group of independent advisors, and they developed something called the Trust Equation, but one of the elements that they talk about is relax your mind. And I've always just found that to be such a poignant set of 3 words, but that really do sum up the idea that if I'm going to go in and engage with you, and of course I have to share the information. Again, I don't want to minimize the importance of IQ, the importance of the technical piece. This is what clients are paying the fee for, of course. But if I go in and my focus is purely on I've got to deliver this information to you, and hopefully get to a place where I can ask you for a referral or something. And that's my main focus. I'm not putting the focus on that relationship. And so I'm missing that. And if I can relax myself a little bit and think my goal here is understand this client, understand this process, deepen our exchange and our engagement, it— a whole world of possibilities opens up. It's especially relevant with difficult clients because if you don't have high EQ, you put the walls up, you get into the dance and you're not engaging and you're not interacting in an open way. So I think the way you framed it is, is very much on point. I tell advisors sometimes write yourself a little note in your book just to keep coming back to The focus needs to be on the client.

Let's talk about COVID and the impact on EQ or how it, you know, what's changed, what's different, et cetera. And are there any communication struggles in the virtual world? Is that understated, overstated? I'm just curious what your take is on that in general.

So this is one of these areas where a lot of times we will do some sort of a workshop and we might ask advisors about current obstacles. So, you're trying to grow your business, you're trying to change something, what obstacles are you facing? And I'm quite frankly stunned by how often over the last year, whatever, 18 months, 19 months, whatever we're into now with COVID how it's come up that their relationships with their clients have been so adversely impacted by having to move to the virtual world. And at first, it was head-scratching to me. And because we run a business whereby long before COVID most everything we did was on the phone or on a webinar, on a WebEx, excuse me, running a webinar. And we would get to go see clients, but infrequently, you know, probably less than 50% of what we did. And it struck me because I thought, I have clients that I've never met, I've never seen them, and yet they would open up, we have a very deep relationship, et cetera. And then I realized that there's a misperception that in order for me to connect with you, I have to be able to see you, that I'm adept at reading your body language in person, that my style is going to be so different if we're in person. And yet, if you think about some of these fundamental principles, self-awareness, what's happening with me right now, Effective listening, self-regulation. What is preventing anyone from being able to do that in the virtual world? We can do it exactly the same. I think, Greg, what's underlying it and that people don't want to talk about is it's very draining for some people. It also puts me a little bit more at risk because I think if I can't see you and I don't know what's happening, I'm not sure what's going on. The complication that we have older clients or somebody who won't get on the Zoom. And so now I'm on the phone. So I think it's got more to do with the advisor's own emotional response and a little bit of fear about what this, my validation of the relationship, it's not as strong, but I try to send the message, you can do all these things from an EQ perspective, soft skills perspective, and you actually can deepen relationships when you don't have the chance to see someone because you're honing those active listening skills we were talking about earlier.

Interesting. And so you think they're in a way just kind of in denial about the root causes or root reasons for this insecurity, and then this is kind of the narrative that they come up with?

That's my view on it because I think that we, again, and this is the beauty of EQ, is being able though to step back and say, what am I really missing here? What am I really saying? And is this more about me than it actually is about my ability to add value to my client?

Interesting. So let— you mentioned before listening with empathy, um, and I, you know, I've read that you've talked about it, that it can be hard, um, even though it may not sound hard, but it actually can be. Um, tell me a little more about that. Why, why are not advisors better at it?

The reason that it is hard for advisors in particular, I think, is that you, when you're a problem solver, when you're a solutions person, when you have a lot of technical knowledge to bring to someone, you're able to put them on a path. You're able to put together a portfolio, a plan, whatever it may be. Oftentimes then, Greg, what you're listening for is for the person to say that they need whatever it is that you're prepared to give them. So in other words, we're, we're listening for a problem that we're able to solve. It's almost like a gotcha, right? Oh, you just said those words. You just presented it. Let me tell you how we can answer that. Now, in fairness to advisors, they do an excellent job of presenting what they do well. The plan is good, the portfolio is good, etc. But you have to understand that sometimes what's underneath what someone presents to you is a little different than what you've answered on the face of it. And listening with empathy means I have a real curiosity about why you've brought this up, not just the fact that you've brought it up. So the tendency for an advisor is answer just what's presented. And I try to get advisors to understand from a psychological standpoint, a lot of times your clients aren't in touch with whatever's going on. The, the stories, Greg, that I've heard over the years of advisors— maybe somebody presents something to say, I need estate planning. Let's take an example, real world. I have 3 kids, they're all over the age of 18, I need estate planning. Okay, great, I can help with that. We have referrals to estate planners. It's going— we're going to be able to work well with them from the perspective of incorporating it into the plan. I know exactly the steps to take. Well, what's underlying it though is I've been given a health diagnosis and my family doesn't even know it and I haven't shared it with anyone. And so if the advisor simply starts to set me up with the lawyer, we've got everything in place, and not to say something like, I'm just curious what prompted now? For you to think about the estate plan? Are there things about the estate planning process that might be obstacles for you? What would be a successful outcome to this? It's the difference between I— somebody— I heard estate plan and I can solve it, and I heard estate plan and it kind of prompts me to think what else is associated with that process for this client. So it's learning to be a little bit more more curious, a little bit more interested, and trying to understand that when someone presents something, it's coming from somewhere. It's not just simply whatever it is they said. So can I care more about where it's coming from rather than what it is that got presented to me to solve?

It's really interesting. I mean, I think a lot of advisors will have like in their toolkit, we have this product, this product, and they'll hear one word and boom, they feel like, okay, we got a match, let's run with it. But to your point, they might be alienating the client. It might be counterproductive. Good chance someone will say, whoa, whoa, whoa, we're going a little too far too fast and you're not even hearing the exact nature of my problem or why I'm coming to you with this.

Exactly.

Yeah, that's definitely interesting and something that advisors can learn from. But I suppose it's hard to, they have to resist that temptation and say, okay, you know, might take longer, maybe it won't work, but you're, you're doing the client the right, doing the right thing by engaging and asking more questions.

Sometimes I simply suggest, Greg, if you feel as though you're ready to solve something, force yourself to ask just 2 more questions and be sincerely interested, right? Don't ask them to check the box, but ask those 2 more questions to see, is there anything else underneath it? And The number of times I've had an advisor come back and say, you know, basically that process saved me because I would have answered something that really wasn't what the client was asking. But I think, you know, are you born with it? Can you learn it? I do think some people are wired more to do this well, but to me, I've seen people learn how to do this more effectively. You just have to commit to it.

Yeah, I mean, it also reminds me of what a good doctor would do on a first visit. Let's say you go there and the patient says, "All right, I'm not sure what's wrong." Ideally, a doctor will keep asking questions and prodding and saying, "Tell me more, tell me more. Are you sure there's this or that?" And a not very good doctor might make a quick diagnosis and say, "You have ABC." You've got it.

I often liken it to the experience of going to a therapist. You know, if you haven't done it yourself, you probably know I know somebody who has, but the best therapist, if you think about it, what they do is they sit there and they just ask you questions. So think about the irony of that. I'm paying my therapist $500 an hour or whatever crazy amount it is. He or she is asking me questions. Well, if I had the answers, I wouldn't be here, right? But it's because of the presenting problem, because I do have answers underneath, or I am holding back something, Or I'm not actually in touch with everything. And that really is the nature of financial work too. It's so deep, it's so emotional, it's so connected to everything else that goes on in someone's life that advisors are in a way in a therapeutic sort of relationship that requires staying with curiosity. Longer than maybe they'd like to when they'd like to just answer it and get on.

Yeah, I mean, I guess that's where the progress happens. They have to keep digging and digging beneath the exterior. Well, unfortunately, we're just about out of time, but the good news is we're going to continue this conversation in another episode. And on that episode, we're going to talk about identifying EQ on the client side and learn what advisors should do and just as importantly not do. So, but before we wrap up today, I'd like to ask for one simple thing that advisors could do today to improve their EQ, or at least be, you know, be more conscious about improving it.

A simple one is throughout the day, and you can put a reminder on your calendar, on your smartphone, you can write yourself a note throughout the day, I say between 10 and 12 times. So this is not even, it does not even take a minute. You really wanna just stop whatever it is that you're doing and check in with yourself. How am I feeling right now? What's happening with me in this moment? Because the more that you can practice becoming self-aware and recognizing your emotions, your feelings, physically, how are you sitting in the chair? You know, what's the self-talk running through your mind? The better and better you get at this. So I'll usually suggest just as a starting point, 10 to 12 times that we're talking, not even a full minute, that you just stop what you're doing and kind of check in, be curious with yourself. What am I thinking? How am I feeling? What's happening with me right now? 'Cause if you do it deliberately, then it starts to become something that you can do more naturally. You don't have to actually stop think about it, you recognize I'm in an agitated state, I need to take some steps, or I'm overly happy, what do I want to step back and think about here? But that's, I think, the best advice, Greg, for somebody just really starting to put toe in the water and experience this.

Excellent. Well, that's a terrific tip. Well, thank you so much. My guest has been Beverly Flaxington, co-founder of The Collaborative. This is Greg Bartalus. Thank you very much.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.