As client demands evolve and increase, one thing is becoming clear: registered investment advisors (RIAs) competencies and skills must do the same, expanding beyond purely financial matters.
Soft skills are a big part of that equation, though advisors should note that the time needed to bolster those capabilities isn’t significant. Likewise, advisors shouldn’t be trite and quick to dismiss soft skills as “fluffy” and “mushy. ” In reality, those competencies are vital in building and improving client connections and that’s vital in fostering the long-term relationships that benefit clients and practices alike.
Clients and prospects are seeking advisors with emotional intelligence and the ability to convey trust. Those are what’s known as soft skills. For advisors, the importance of emotional intelligence cannot be overstated. While that sounds daunting, it’s not. Rather, it confirms that clients value more than just portfolio performance. Actually, they’re place emotional components above returns.
Emotions, Time Matter
It bears repeating: clients are after more than just investment performance. Vanguard's new Emotional & Time Value of Advice survey confirms. Among the interesting tidbits from the study is the fact that advised clients come to realize that they gain substantial time savings and peace of mind when transitioning from the do-it-yourself camp.
More confidence and saved time are concepts of which to be dismissive. Particularly in the world of investing, they’re “holy grail” ideals, confirming that if advisors can deliver on those fronts, they’re likely to have more satisfied clients.
“Whether they work with a human financial advisor or a digital-only advisor, 86% of advised investors report having more peace of mind related to their finances as a result of advice,” according to Vanguard. “Advised investors experience a wide range of emotional benefits. More than 60% of human-advised investors feel less anxiety, worry, sadness, and disappointment when it comes to managing their finances. Instead, they feel more confident, satisfied, secure, and proud. ”
As for saving time, advisors are already doing that on an intra-practice basis, so why not highlight the perks associated with improved time value for clients?
“Three out of four advised investors reported saving time, with the median time saved of two hours per week (over 100 hours annually), enabling them to spend more time on meaningful activities like leisure, time with family, and exercise,” adds Vanguard.
Embrace Customization
Another takeaway from the Vanguard survey is the financial value of personalized advice. Translation: customization currently is and will remain a top-of-mind priority for clients. Advisors that acknowledge and act on that will thrive while those that don’t put their businesses at risk.
"Understanding the emotional and time value of advice is essential to advancing how we serve investors," said Paulo Costa, Ph. D. , CFP®, Vanguard Senior Behavioral Economist. "Our research spotlights real impact around how advice makes people feel—more confident and less stressed about their financial lives. When we overlook the emotional and time value of advice, we risk undervaluing its true impact. It's not just about dollars and cents; it's about confidence, clarity, and life well-being. "
