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Important Skills Every Financial Advisor Should Possess


Being a successful financial advisor requires more than just the right certifications and licensing or knowledge of financial planning. There are also certain hard and soft skills that advisors need to master in order to deliver top-tier service to their clients and grow their practices. Developing these financial advisor skills can take time but the return on your investment can be well worth it in the long run.

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Hard vs. Soft Skills for Financial Advisors

In any profession, skills are typically categorized as being hard or soft. Hard skills are learned abilities that are acquired through firsthand experience, education or a combination of the two. These types of skills are often profession-specific and relate directly to the type of work that someone does day-to-day.

Soft skills are non-technical in nature and are relationship-focused. These skills can be innately possessed or developed over time. Soft skills are universal across different professions and are not specific to any one field or career path.

Are hard skills or soft skills more important for a financial advisor? That’s an often-debated question and there’s no right or wrong answer. As an advisor, you’ll apply both hard and soft skills as you handle the various tasks that are required to run your business and serve your clients day-to-day.

Which Financial Advisor Skills Do You Need?

A financial advisor researching information to learn new skills.

There are many skills you might possess as an advisor, but some may prove to be more valuable than others. Whether you’re just starting your advisory business, or you’ve been serving clients for years, here are the most important skills to cultivate.

1. Communication Skills

This soft skill is vital for advisors for several reasons. If you’re not able to build a rapport with prospects or existing clients, that could make your job more difficult. Your clients may be less inclined to trust you or doubt your other skills if you’re not able to get your ideas across clearly or they feel that you’re talking at them versus to them.

Strong communication skills are necessary for breaking down financial jargon and complex concepts in a way that’s easy for clients to understand. Your clients need to know that you know what you’re talking about, without getting bogged down in terminology they aren’t familiar with.

Clients aside, good communication skills are essential for networking and working alongside your colleagues or team members. If you’re heading up a group project at work, for instance, you need to be able to ensure that communications flow smoothly across all team members so that everyone is on the same page.

2. Attention to Detail

Being detail-oriented is another valuable soft skill financial advisors need to have. There are different ways in which this skill is applied. For example, these skills are necessary for:

  • Analyzing market trends in order to identify investment opportunities or strategies for clients
  • Minimizing the potential for errors when managing client accounts or handling back-office tasks, such as recordkeeping and accounting
  • Ensuring that any financial reports you’re generating for clients or for your business are accurate

Attention to detail also ties in with good communication skills. When clients talk to you about their needs or goals, you need to be able to not only listen but also pick up on the finer points of what they’re saying so that you’re providing services that are truly customized to their needs.

3. Research Skills

As an advisor, you likely spend a good deal of time researching the markets or comparing different investments. To do that effectively, you need to be able to identify the most important information to study, collect that information, organize it and interpret it. The same is true when researching your clients’ assets in order to make portfolio decisions.

Basic research skills are something you might have picked up in high school or college. Applying those skills as an advisor means familiarizing yourself with the different tools that are available to help you conduct market research and knowing how to use the data that you find in order to provide the best outcomes possible for clients.

4. Organizational Skills

A tendency to be disorganized can spell disaster for your success as an advisor. Good advisors understand the importance of organization as it relates to things like recordkeeping, scheduling and time management.

For instance, say you need to research a new investment for a client. If you lack a systematic plan for collecting that information, you may end up wasting time sifting through irrelevant data. And if you’re unable to organize it clearly in a chart, table or report your client might not be able to make much sense of it.

5. Analytical Skills

It’s one thing to be able to do research and collect data; it’s another to be able to analyze and interpret it. Analytical thinking skills can help you create a framework for providing solutions to clients, based on all of the information that you have.

For example, say that you’re meeting with a prospective client for the first time. You’ve asked them to complete a questionnaire telling you about their financial situation. Using the information that you have, you should be able to analyze where they are and offer some concrete solutions to help them achieve their goals.

Those same skills can also come into play when working with existing clients. If market volatility suddenly increases, for instance, you need to be able to think clearly about the situation and all potential outcomes should you do X, Y or Z. In situations where time is of the essence, there’s no room for guessing.

6. Emotional Intelligence Skills

If you’re unfamiliar with EQ skills, they center on being able to recognize emotions, understand what they’re telling you and manage them in interpersonal situations.

There are many EQ skills financial advisors can apply, starting with empathy. Having a sense of empathy matters, as discussing someone’s financial situation with them is highly personal. While you may not have experienced the exact same situation as your client, you need to be able to empathize with them and what they’re feeling.

Social skills are another EQ skill that financial advisors should have. If you’re highly uncomfortable in social settings, that could make it more challenging to build a professional network or connect with prospective clients.

7. Technical Skills

Technology is reshaping the way that financial advisors run their businesses and advisors who aren’t utilizing tech risk being left behind. Artificial intelligence, for example, leads the latest wave of tech innovations that are affecting wealth management.

Advisors can benefit from utilizing tech in different ways. For instance, portfolio rebalancing software programs and apps can help you automate workflows, saving your business time and money. Compliance software programs, meanwhile, can ensure that you’re not at risk of violating any regulatory guidelines.

Online lead-generation tools can help simplify the process of connecting with prospective clients. Rather than having to spend hours cold calling, you might be able to get qualified leads sent directly to your inbox. Are you looking to expand the marketing of your financial advisor practice? Try SmartAsset AMP, our holistic client prospecting and marketing automation platform.

Bottom Line

A financial advisor assessing her skill set to identify areas that could use some improvement.

Some financial advisor skills come naturally while others need to be learned. Assessing your personal skill set can help you identify any areas or weak spots that could use some improvement. You can also take time to update some skills that may need refreshing as times and trends change. As you’re able to improve your skills you may find it easier to be successful at both helping clients as well as finding new ones.

Tips for Growing Your Advisory Business

  • A consistent flow of clients can be a good way to grow your advisor firm and a lead generation service can often help you do that. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
  • Obtaining certifications or designations can help you acquire some of the skills that financial advisors need to have. For example, you might choose to become a certified financial planner or a chartered financial analyst. Either one would put your time management and organization skills to the test, as you’ll need to study and prepare for the required examinations to get certified.

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