The real ROI of emotional intelligence in financial services

In the world of financial advice, trust is everything. It’s the underpinning of adviser-client relationships. For years, we’ve discussed the “soft skills” that build trust: empathy, listening, and integrity. But what if we could prove that these aren’t soft at all?

Emotional intelligence (EI) has long been associated with effective leadership, improved communication, and stronger client relationships. But can it deliver a commercial return? Can an investment in EI training improve sales, referrals, retention, and profitability?

The answer is a resounding yes, and the numbers back it up. In this blog, find out how research findings that link EI to performance at work could lead to financial payoffs for financial planning firms.

A hypothetical case study: Boutique financial firm

Let’s take a realistic example. A growing financial planning firm with:

• £950,000 in annual new business revenue
• Six financial advisers, each averaging £158,000 of revenue
• £150 million in assets under management (AUM)
• 10 client referrals a year
• Client retention of 92%
• One adviser leaving the firm annually.

This is a strong firm. But what if it became an EI-led firm?

Boosted sales performance

EI has a significant impact on sales outcomes, particularly in roles that involve relationships, such as financial advising. In a pilot programme conducted with American Express financial advisers, Luskin, Aberman, and DeLorenzo (2005) found that advisers who completed an emotional competence training programme averaged 24% more in gross sales than those in a matched control group.

The training focused on developing self-awareness, empathy, emotional regulation, and interpersonal effectiveness — all critical skills for building trust and motivating client action.

To keep our model conservative, we’ll use a 10% uplift:

• Adviser-driven revenue: £158,000 × 6 = £948,000
• 10% increase = £94,800 in new annual revenue.

Improved client retention

While no single study directly quantifies a retention lift from EI, the connection is clear: high-EI advisers communicate more effectively, handle client emotions with empathy, and create longer-lasting trust. This shows up in stronger client loyalty, especially during volatile periods.

Assuming a modest increase in retention from 92% to 95%:

• AUM retained: 3% of £150 million = £4.5 million
• Fee revenue retained (at 1%): £45,000 a year

More referrals

EI isn’t limited to client retention. It helps you become someone they want to recommend.

When an adviser speaks to a client’s emotional needs, such as reducing anxiety around retirement or helping them feel more in control, it creates deep emotional value. This makes the adviser more memorable and relatable in the client’s social circle.

For example, a client who once felt anxious about their retirement planning is far more likely to recommend their adviser when a friend shares a similar fear.

Why? Because the adviser didn’t just offer solutions, they understood.

Clients who feel seen and supported are better able to articulate the value of advice, especially in emotional terms that resonate with others.

Although there’s no definitive study assigning a fixed percentage increase in referrals from EI training, emotionally intelligent advisers are more referrable because the client clearly understands their value.

Let’s model this with realistic assumptions:

• Baseline: 10 referrals per adviser/year
• Post-EI: 15 referrals per adviser/year (50% increase)
• 5 extra referrals × 6 advisers = 30 new clients/year
• Average annual revenue per new client = £3,000
• New revenue from referrals = £90,000/year

Reduced adviser turnover

Financial advice is one of the most emotionally and cognitively demanding professions. Advisers must navigate complex technical issues, regulatory requirements, market volatility, and intense interpersonal demands, all while operating under strict time pressure and meeting client expectations.

Hunter et al. (1990) found that performance variability is highest in complex roles, such as financial advising, because success hinges on more than just technical knowledge. It requires emotional resilience, adaptability, and the ability to manage difficult conversations under pressure.

That’s where EI plays a critical role.

High-EI advisers are better equipped to regulate stress, navigate interpersonal challenges, and maintain psychological wellbeing. A meta-analysis by Van Rooy and Viswesvaran (2004) concluded that EI is a significant predictor of job performance and emotional stability, especially in high-pressure environments.

Luskin et al. (2005) further found that EI training for financial advisers reduced stress levels by 29%, directly supporting resilience and wellbeing. Broader workplace research (Attridge, 2009) indicates that improved emotional engagement and wellbeing are correlated with lower turnover rates across various sectors.

Let’s break down what this means financially:

Pre-EI:

• One adviser leaves per year
• Total cost to replace:
  • £8,000 recruitment (advertising, agency fees)
  • £37,000 revenue lag during pipeline build (six months of underperformance)
  • £4,000 onboarding/training costs
  • Total = £49,000 per leaver

Post-EI:

• Turnover reduces to one adviser every three years
• Equivalent to 0.33 advisers/year
• Annualised saving:
  • £49,000 × (1 – 0.33) = £32,830 per year

This makes the cost of not investing in retention and wellbeing much clearer.

Better leadership = smarter use of time

In any advisory business, staff pay close attention to how leaders behave. Not just in big decisions, but in the day to day: how they give feedback, how they handle pressure, how they speak when something goes wrong.

Leaders with EI take responsibility for the atmosphere they create. They know when to listen and when to step in. They can read the mood in a room, adapt their style to the person in front of them, and keep conversations constructive, even when there’s tension. That kind of leadership builds trust, reduces friction, and helps people stay focused on the work.

In high-stakes professional settings such as financial advice, communication breakdowns, emotional friction, and reactive behaviour can significantly disrupt productivity. Research by Goleman (2001) suggests that emotionally intelligent leaders foster more resilient and adaptable teams by cultivating emotional awareness, promoting psychological safety, and facilitating constructive dialogue, even under pressure.

Let’s look at the numbers:

• Reduced interpersonal conflict
• Better team collaboration
• Improved morale and employee engagement
• 10 staff × 1 hour saved/week = 10 hours
• Valued at £50/hour effective time = £500/week
• Across 48 working weeks: £24,000/year in recovered productivity.

This doesn’t even account for cultural improvements, morale boosts, or motivation increases; it’s purely the value of time.

Tallying the impact

When you put all the numbers together, the commercial case for EI becomes clear. These aren’t soft benefits — they’re measurable shifts in behaviour that affect revenue, retention, and team performance.

 

Impact area		Annual value
Sales performance uplift (10%)		£94,800
Improved client retention (3% AUM)		£45,000
Additional referrals (30 clients)		£90,000
Reduced adviser turnover		£32,830
Leadership and team efficiency		£24,000
Total annual gain		£286,630

 

The return is significant; even small-scale interventions in EI can drive meaningful commercial results within a year. These outcomes compound over time through stronger relationships, better client loyalty, and a more stable, high-performing team.

Why this matters

Firms often invest in systems, platforms, and strategies designed to drive results. But performance, retention, and referrals don’t just come from processes; they come from people.

The EI of your advisers and leaders directly affects how clients feel, how teams function, and how trust is built and maintained.

What’s outlined here isn’t a theory. It’s a commercial case for a skill set that’s measurable, learnable, and applicable at every level of your business. EI improves how people communicate, lead, and respond under pressure, and when that shifts, the numbers follow.

 

 

References

Goleman, D. (1998). Working with emotional intelligence. Bantam Books.

Goleman, D. (2001). An EI-based theory of performance. In D. Goleman & C. Cherniss (Eds.), The emotionally intelligent workplace: How to select for, measure, and improve emotional intelligence in individuals, groups, and organizations (pp. 27–44). Jossey-Bass.

Hunter, J. E., Schmidt, F. L., & Judiesch, M. K. (1990). Individual differences in output variability as a function of job complexity. Journal of Applied Psychology, 75(1), 28–42. https://doi.org/10.1037/0021-9010.75.1.28

Luskin, F., Aberman, R., & DeLorenzo, A. (2005). The training of emotional competence in financial advisers. Consortium for Research on Emotional Intelligence in Organizations. https://www.eiconsortium.org/reports/emotional_competence_training_financial_advisors.html

Van Rooy, D. L., & Viswesvaran, C. (2004). Emotional intelligence: A meta-analytic investigation of predictive validity and nomological net. Journal of Vocational Behavior, 65(1), 71–95. https://doi.org/10.1016/S0001-8791(03)00076-9