new skills / takasuu

This article appears in the March 2022 issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.

“Coach’s Forum” is a place to ask your questions, tell your stories or give your opinions on any aspect of practice management. Our objective is to build a community with a common interest in making financial advisory practices as effective as possible.


My practice is part of a large bank-owned dealer firm and we have just been told that, with a few exceptions, all Covid-19 limitations will be lifted. That means my team and I will be able to fully operate from our branch office.

Over the past two years, we made several changes to our business to accommodate the pandemic, so I am not concerned about how we will function. However, I have begun to wonder if I should personally improve my ability to lead the team and continue to grow the business. Do I need more knowledge, better skills, a different allocation of my time? Are you hearing this from other financial advisors?


Yes, I am having an increasing number of conversations with advisors who are questioning what new skills they will need as the effects of the pandemic (hopefully) subside. The difference between you and many others, however, is that their concerns are often reactionary in response to some inadequacy, whereas you are being proactive. Congratulations on your foresight.

I will ignore the mechanics of your business requirements that have been written about so often already — things like effective videoconferencing, managing staff remotely and adapting processes. I sense what you are seeking is advice on the dynamics of your business, such as strategy, leadership and focus.

As stated in previous columns, the best way to begin strategically planning your business is to put yourself in the shoes of your best clients. What kind of experience would make them say “Wow!”? Good service, for example, is no longer a differentiator — it’s an expectation. The absence of good service will differentiate you, and not in a positive way.

Indeed, the traditional advisor value proposition of being a good planner, investment manager, insurance consultant and service provider has been displaced by technology, access to information and self-service capabilities.

EQ vs. IQ

Which skills are required to adapt to all these forces? The starting point is emotional understanding of what your clients are feeling. In more familiar terms, your emotional intelligence or emotional quotient (EQ) will be more important than your IQ.

Your EQ can quantify your ability to understand other people, what motivates them and how to work cooperatively with them. The other side of that statement, however, is that you first must understand yourself and your own motivations. According to Daniel Goleman, an American psychologist who helped popularize the concept, there are five key elements to emotional intelligence:

  • self-awareness — recognition of the way emotions affect behaviour
  • self-regulation — ability to control impulsive feelings and behaviours
  • motivation — ability to motivate oneself and others
  • empathy — awareness and consideration of the feelings of others
  • social skills — ability to pick up on emotional cues

Clients’ judgment can change, or even become impaired, under stress. There are ample resources online to help develop better EQ.


Simply understanding your clients is not enough; you must be able to demonstrate that you understand.

Walking clients through a disciplined process as they re-evaluate their most important life choices will not only give you a deeper understanding of their priorities; it will also confirm your commitment as their trusted advisor. The process will position you to proactively provide guidance and allow you to progress from technician to confidante, coach and cheerleader.

You might also find value in a more thorough understanding of behavioural finance. That is the psychology of why investors often lack self-control, act against their own best interests and make decisions based on biases instead of facts.

The advice here is twofold. First, review your discovery method to ensure it is founded on listening, not selling, and encourages the conversations necessary to fully understand their concerns.

Second, review your planning process and assumptions. Can your financial and investment planning accommodate changes in priorities? Do the assumptions around portfolio returns, risk profiles, withdrawal rates and income needs reflect the new reality some clients feel?

Your business

To protect your profitability in this new reality, you must know where it comes from. The Pareto principle, or the “80/20 rule,” indicates that 80% of revenue comes from 20% of clients. That is likely true; however, for advisors, revenue isn’t the determinant of practice stability and value — profitability is. And the rule there is 90/10 — 90% of your profit comes from about 10% of your clients.

Here’s a simple assignment. Calculate the profits earned in your business last year (not what you paid yourself, but profit after fair compensation to you for your advisor duties).

Next, rank, say, your top 50 clients by the revenue they provide and total those revenues. Compare that total to your profitability.

I am willing to bet that fewer than 50 clients contributed 100% of your business’s profitability. The key to survival, therefore, is to identify the clients who make your business profitable and do everything you can to deepen and strengthen those relationships by exceeding their expectations.

What are those expectations? Additional products and services? More responsible investing options? Different frequency of contact? An enhanced service level agreement? A revised fee structure? Find out by asking them.

Next, consider staff recruitment and retention. Work-from-home options and the ability to post jobs online in multiple places have expanded the geographical scope, making it easier to hire. Once staff members are hired, however, onboarding and then tracking satisfaction and motivation will be needed to retain them.

The new normal requires insight into what makes your business work (or not work). That means tasks such as setting targets, gathering and analyzing data, comparing results against key performance indicators and measuring efficiencies of standard operating procedures. It means being flexible and able to adapt quickly to events and changes in circumstances. It means taking ownership in your business and being a leader in all respects.

George Hartman is CEO of Market Logics Inc. in Toronto. Send questions and comments regarding this column to George’s practice-management videos can be viewed at