Company Profiles

Building Emotional Intelligence Among Wealth Managers

Tom Burroughes, Group Editor, March 23, 2022

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We talk to a professional psychologist, who has worked in areas such as sports, who is now helping a wealth management firm in Florida to build a resilient, empathetic and effective group of advisors.

There is a lot of talk today about how having “emotional intelligence” is as important as raw brainpower – IQ – for being an effective wealth manager. Even for those skeptics about a 'fashionable' term, the importance of having well-rounded people in the industry should be obvious.

The idea that a professional psychologist can help wealth managers stay on top of their jobs, help clients navigate uncertainties and win business, still appears to be relatively new. At one firm, Cyndeo Wealth Partners, based in St Petersburg, Florida, the business has taken the step of bringing such a professional into its ranks.

Dr Joe Carella a clinical and sport psychologist, started to work with Matt Kilgroe, CEO of Cyndeo, about five years ago. He is senior faculty and custom solutions lead, at the Leadership Development Institute, Eckerd College, in the US. For his work with Cyndeo, he is as an executive coach/performance psychologist.

Dr Carella has also worked with with professional sports teams including the Tampa Bay Buccaneers and Orlando Magic – giving an insight about the importance of a team ethic. 

“I help people and organizations to perform at a more efficient and elite level. I help people to clarify their identity. I help people to identify their goals…. how people can enhance their performance,” he told Family Wealth Report.

Dr Carella said it was important to develop "emotional intelligence" so that people can understand the impact they have on the world and other people, and learn to regulate their emotions and understand those of other people. Coming out of a two-year pandemic when in-person relations were severed or badly disrupted, the need to get this right is clear.

With inflation rates high, concerns about geopolitics, such as the Ukraine crisis, and disruptions to established business relationships, high net worth clients have a lot to worry about. Worried people make mistakes. Already, the wealth industry has become familiar with the discipline known as behavioral finance, which examines human conduct, such as panic buying or selling, overconfidence in investment cleverness, or unwarranted gloom about market events. However, EQ goes much further than the insights of behavioral finance; it aids understanding of how to read others' emotions, raises awareness of our own, helps to maintain a sense of balance in testing times, and encourages empathy. On the latter point, an advisor who is sympathetic, yet able to give difficult advice, is worth his or her weight in gold to a wealth management business.

“You [advisors] must be a shoulder that other people can cry on. Let’s face it – people don’t enjoy being told they are wrong,” Dr Carella said.

Client retention rates, net promotor scores and reports from advisors on how they interact with clients can help measure how effective a focus on psychology can be, he said.

A team of advisors who are confident and happy about what they do are more likely to sympathise with clients and engage with them productively. “Creating a culture can be infectious. The emotions don’t lie,” Dr Carella said. 

Some in the wealth sector have wondered how his insights apply to a field such as wealth management, and they required a bit of leadership to understand the value of it, Dr Carella said.

“We work with advisors to find their own language so they can be honest as well as kind…Good advisors can see things that clients can see,” he said. 

The role that psychology and ideas associated with it has been explored in the wealth management sector before. For example, investor, entrepreneur and academic Dr Rainer Zitelmann has sought to plot what drives people to attain great wealth, finding that some of the answers aren't as obvious as they might appear to be.

Generational change
There can be differences in how certain generations handle advice and adverse situations. With some GenZ and Millennials there may be the assumption that they “should be trusted to do what they do, and people should just get in line,” Dr Carella said. “More self-aware people, at any stage of life, [realise] that this is and should be about the client.”

To illustrate what he does, Dr Carella said people he works with are encouraged to ask questions such as “what do I want to be as a CEO?” “How self-aware am I?”

So what does the firm make of this work? Kilgroe told FWR that where firms’ employees are happy, that tends to rub off on clients and builds confidence. And those clients are more likely to refer the business to other people. All sides win, he said. 

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