Top 5 Skills for Financial Advisers: What Will Set You Apart?

As the scope of financial planning and advice expands, client expectations increase, revealing a variety of new and essential skills that financial advisers are expected to have in order to better serve their clients.

While the role of financial advisers was once purely associated with financial planning and  management, treated as a profession typically only useful to the affluent public, today, it goes far beyond that.

Here, we examine the top six skills you should have as a financial adviser to be successful and help set you apart from other professionals. 

What is a Financial Adviser? 

A financial adviser is hired to help create a plan for an individual’s finances, utilising their skills and expertise to set and reach specific financial goals for their clients in both the short term and long term.

Whether this includes saving up for a deposit on a property, setting up a retirement plan, or simply offering advice on how to best manage income, a financial adviser helps their clients to be more mindful of their financial habits, while also working closely with them to achieve a brighter financial future.

However, in order for effective financial advice to be delivered, a relationship of trust must first be developed, where clients feel comfortable to be transparent with their financial adviser and vice versa. The means advisers must understand their clients’ current spending and saving habits, expenses and income - inside and out - to provide the most accurate advice. 

This also means it’s crucial that financial advisers have the appropriate set of skills,  knowledge, and qualifications to be successful in their roles.   

For instance, many financial advisers seek out a recognised professional  qualification, such as those offered with The London Institute of Banking and Finance (LIBF), or more specifically the LIBF Level 4 Diploma for Financial Advisers (DipFA®). This qualification is particularly ideal if you’re at the beginning of your career, enabling you to gain the necessary industry expertise to qualify as a financial adviser.

The Top Skills for Financial Advisers

1) Analytical Thinking

With changing circumstances and an ever-evolving industry, it’s essential you employ analytical thinking as a financial adviser, to adjust and devise new solutions to rising issues for their clients, such as market volatility when investing, inflation or changes in interest-rates. This is especially true when advisers are called to assist their clients with investment opportunities, where, for instance, a client expresses interest in an investment, but has limited monetary resources for it. 

In this case, financial advisers must have deep knowledge of the risk-return ratio, which drives every aspect of a financial plan, to structure a comprehensive investment portfolio. In this instance, financial advisers will need to use their expertise to make suggestions on reallocating assets and how goal change will be the most effective. 

Along with that, advisers must implement the updates strategy, while keeping an eye out on new products emerging in the market, investigating those options, to identify whether they are to the benefit of the client. Here is where analytical thinking is vital, in order to determine which products are of lowest risk and most advantageous to invest in. 

2) Detail Oriented 

As a financial adviser, you’ll deal with confidential financial information and sensitive data on a daily basis, so it’s only expected that you should be detail oriented, as missing even the slightest detail can be highly detrimental to your clients and have lasting impacts.

From paying close attention when reviewing client requests and their financial health, to devising an effective investment strategy, every little detail must be thought out and considered.

For example, when a client is looking into making an investment, there's a list of insights a financial adviser must first collect before providing them with guidance. They must initially review the client’s financial health and eligibility for investment, the risks associated, along with the emerging trends of the industry. 

Once these steps have been completed, financial advisers must lay out, in full-detail, the actions they’re suggesting their client to make and the investment strategy they’ll develop. 

Not only does this safeguard your client from making investment decisions they’re not comfortable with, but also protects you from being accused of any wrong-doing by the client. 

The same thing is true when they’re recording figures on financial reports, they must remain detail oriented to ensure reporting and future strategies are accurate and depict the true financial state of clients.

3) Interpersonal Communication

Due to the sensitivity of information that’s shared between financial advisers and clients, it’s essential that a relationship of trust is built, and a great tool in achieving that is effective interpersonal communication. In other words, it helps if you’re good with people. 

Financial advisers tend to work with clients in one-to-one settings, so you must be able to adjust your communication style based on the individual(s) you’re talking to and their particular set of circumstances.

To add, by having strong communication skills, you’ll be better able to explain complex terminology and concepts to your clients in a clear and easy-to-understand manner. This is especially important when conveying your research findings and financial advice to avoid potential confusion or overwhelm.

However, it’s important to note that interpersonal communication doesn’t only refer to verbal communication. It's vital that financial advisers are also good active listeners too, as you will  need to pay close attention to your clients’ financial objectives, as well as their concerns, to provide more personalised guidance and solutions. 

Body language and approachability (i.e. eye contact, smiling, or mirroring the other party) is also a big part of being skilled at interpersonal communication, as financial advisers are expected to be actively engaged in their conversations with their clients at all times. If a client feels that they are seen, heard and can feel comfortable around you as a result, this will only add to your success in the role.

4) Risk Assessment 

Risks are a huge aspect of the finance industry, especially as far as investments are concerned, and as a result of the market’s volatility, another important skill you should master as a financial adviser is risk assessment and management. 

Typically, risk assessment occurs during the research phase of a strategy, where advisers identify the challenges their clients should anticipate as they strive to reach their financial goals. Such challenges may include:

• Fluctuating markets
• Lack of job stability
• Economic inflation
• An individual’s credit risk, and 
• Legal reform

These, if not managed well, can influence other aspects of a client’s financial strategy. From affecting the success of investments, to increasing financial stress and limiting the client’s income, the repercussions can be catastrophic for a client’s financial health. 

Therefore, by employing the appropriate risk management strategies, you will be better equipped to deal with unpredictable scenarios that may arise, as well as devising an effective plan to address them. 

Additionally, you can include an overview of risk management strategies from the get-go in your client’s financial plan, better preparing them for the potential risks they should expect and how they will be dealt with. This will also contribute to building a stronger, trusting relationship with the client through this added level of transparency.

5) Technological Literacy 

Technological literacy isn’t a “nice-to-have” skill for financial advisers anymore, but more of a “need-to-have” set of skills.

In order to deliver an exceptional experience to your clients, you need to understand how technology works, relevant to the finance industry, and how you can make the most of it. 

From financial planning software to consumer apps, you must be familiar with the technology available to not only better serve your clients, but to make your job easier as well. 

For instance, in the day-to-day operations of the role, financial advisers use numerous digital platforms, whether that be to analyse financial data, research trends, or devise digital financial statements (among other things).

Such platforms have enabled financial advisers to employ more accurate reporting and utilise automation for mundane tasks which  allows for more free time to concentrate on the more important aspects of their work that require critical consideration. 

It’s also worth mentioning that, financial advisers can also take advantage of technology to market themselves, develop their careers, and increase their client base, so knowledge of social media can also be beneficial to their work.

Develop Your Career as a Financial Adviser 

With a continuously evolving professional landscape, where new concepts, tools and technologies are being introduced every day, it’s essential that you develop the critical skills required of you as a financial adviser in the modern world of work..

Honing in on these skills will not only set you apart, but mastering them will give you the potential to increase your salary, and secure your dream job in the world of finance. 

Take the first step to becoming a financial adviser with our 100% online LIBF DipFA qualification.