The Importance of Being a Continuous Learner for Financial Professionals

We speak with Ryan Sullivan, Vice President and Managing Director of Applied Insights at Hartford Funds, about the importance of financial education for financial professionals and an area that financial professionals should focus on this year. Sullivan also shares how financial professionals can navigate the rise of financial advice on social media like TikTok.

When we think about financial literacy, we often think about your everyday beginner investor. Why is it also important for financial professionals to pursue continuous financial education?

It’s a daunting task: financial professionals need to keep informed about a variety of changes, from legislative proposals, new tax laws, state regulations, product updates, fintech innovations and more just to be able to provide their clients sound financial guidance. Successful financial professionals are very intentional about continuously expanding their knowledge. Instead of looking at this type of education as an obligation, they see it as an opportunity.

Being well-informed can help financial professionals offer historical perspective and context to help prevent clients from making overly emotional or impulsive investment decisions—especially in a volatile market or sustained downturn. There also seems to be a positive correlation between how much financial professionals learn and how much they earn, as they can garner a reputation for being a well- informed resource among their peers and clients’ other centers of influence, such as their tax or legal counsel.

Ultimately, having up-to-date knowledge yields financial professionals confidence and conviction—both key in running a successful practice. It’s not about knowing everything, since that’s not possible, but rather being well-informed enough to know when to ask the right questions and where to look for answers.

How can financial professionals best implement continuous learning into their day-to-day routine?

Many financial professionals feel their time is limited. That said, it’s essential to be intentional and efficient in seeking to stay informed. Fortunately, some basic investment tenets can provide useful reminders:

Diversify: intentionally include a wide range of reputable sources to help limit concentration risk or confirmation bias
Allocate: use different mediums to optimize your time spent—print or online sources when at your desk, podcasts when on the road, social media when you’re in a rush, etc.

Be systematic: Allocate some time each day to stay up to date, versus trying to learn large amounts of information at once.

Is there a topic or trend that financial professionals should focus on this year?

Given the ever-changing nature of markets, product innovations and regulation, it’s tough to choose just one, but the rapid advancement in Generative AI and related tools such as ChatGPT creates many potential implications for financial professionals.

Questions for financial professionals to consider include: To what degree can they leverage the technology themselves to better serve their clients? If more routine tasks can be automated, it may free up time for financial professionals to do more important, client-facing work. On the other hand, will AI become so adept at providing seemingly personalized responses that financial professionals’ jobs are at risk?

For investors, there are similar questions to consider: Which companies can create and maintain a dominant market position over the long haul? Or will the tools be so quickly commoditized that they will be difficult to profit from? If AI tools like ChatGPT make certain jobs redundant, will unemployment rise quickly, hurting the economy and one’s long-term job prospects? And what about the increased risk of financial fraud?

Given the rapid pace at which this technology will evolve, being a continuous learner will be a great benefit to financial professionals going forward.

How can financial professionals best educate their clients on changes that might impact their financial plan?

Of course, it helps when financial professionals are being proactive with their communication, so clients feel they’re continually informed about what’s changing. If they don’t, investors may seek out information on their own, perhaps from less-than-accurate sources. If clients feel they aren’t receiving adequate communication, they may find a new financial professional who does a better job of keeping them informed.

But what’s the best way to communicate about changes to which clients may have an emotional reaction? Here’s a simple framework I call “EPIC,” an acronym that stands for Empathy, Perspective, Insights and Choices. It’s a powerful way to help move clients from fearful thinking to forward motion.

Empathy: Leverage your social and emotional IQ to ensure you’re truly understanding clients’ fears and concerns before diving into technical explanations. The reason many clients use a financial professional versus investing on their own is they want someone to listen to them. Resist the urge to rush through this step, as sometimes it can be the most important for solidifying relationships.

Perspective: Next, provide some historical context, so clients get a sense of how this situation may unfold. Incorporate some relevant technical details without overdoing it, as clients often don’t hear or think as well when they’re stressed. Then share stories of how you’ve helped other clients work through similar challenges, reminding them that they’re not alone in this journey.

Insights: Help clients see how these changes may affect them personally, which is often their most pressing concern. If they don’t have a financial plan yet, external market or regulatory changes can provide a great impetus to create one. If you’ve already developed a plan with your clients, review it in context of the changes, highlighting any aspects that may be impacted.

Choices: Clients often feel helpless when factors outside their control potentially impact their financial security. By taking time to lay out the choices—even the unpleasant ones—that clients have regarding how they save, invest, spend, borrow, work, etc., they may feel more empowered to make an informed decision—even if that decision is to just stay the course for now.

By leveraging the EPIC framework, financial professionals can ensure they’re communicating with clients in a purposeful, consistent and forward-looking manner.

How are financial professionals navigating the rise of financial advice on social media like TikTok?

Perhaps the worst thing a financial professional can do is ignore these platforms and pretend this type of engagement isn’t happening, because it is—at increasingly fast rates. How can financial professionals become more aware?

First, they can ask their clients what sources and platforms those investors use to stay informed. Next, financial professionals can set up personal accounts on those sites to see first-hand how “financial influencers” (aka “finfluencers”) are providing information, as well as to see the reaction and engagement their content creates. If nothing else, financial professionals should know how many unlicensed “experts” provide thinly veiled “get rich quick” schemes under the guise of “infotainment,” in part to be able to warn their clients—and their children —about the risks of following some of these “pied vipers.”

The great opportunity for financial professionals who are already leveraging video in their marketing efforts is that one video can be edited for use on a variety of platforms. While ideally financial professionals would create content specific to a particular platform, it may not be worth the additional time, money and effort to do that. It’s better to take small, iterative steps to expand one’s social media presence than to commit a lot of time and money up front, only to later scale it back.

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.