We are all – hopefully – familiar with the acronym "AI", but do we understand the significance of "EI"?

We read and talk a lot about “AI” – artificial intelligence – but what about “EI” – emotional intelligence? The author of this article, Roman Kubiak TEP, partner and head of private wealth disputes at Hugh James, discusses why the rise of techology means that private wealth professionals and leaders need to be more human than ever. This is a theme that the editor of this news service heard recently at a funds conference in Luxembourg. With the rise of technology, human qualities of value are more, not less, important. The editors of this news service are pleased to share these insights; the usual editorial disclaimers apply. To respond and comment, email tom.burroughes@wealthbriefing.com

Private wealth disputes are on the rise. According to figures published by the Ministry of Justice, the number of disputes has nearly doubled since 2017 (1).

Factors contributing to this rise include a boom in house prices and strong yields on long-term investments, an ageing population with concurrent increases in diagnoses of dementia and Alzheimer's, greater awareness of individuals’ legal rights coupled with a surge in those seeking to capitalise on that, and, some may say, a more litigious environment with people willing to question and challenge the status quo.

The technological revolution
Meanwhile, the use of tech and artificial intelligence (AI) is also on the rise in the professional services sector. From our now routine video calls and meetings to document review, copy production and contract analysis, AI is reshaping how we work. A 2023 report by Goldman Sachs last year estimated that AI would replace several roles with administration support, legal, management and financial ops among the hardest hit (2). 

Those who embrace AI responsibly, sensibly, and effectively are likely to be the ones who survive. But those who embrace their emotional intelligence (EI) will be the ones who thrive.

The five components of EI
Following hot on the heels of the heavily-thumbed business self-help bibles of the late 80s such as The 7 Habits of Highly Effective People and Feel the Fear and Do It Anyway which now gather dust on many a professional’s bookshelf, came Daniel Goleman, an American psychologist, author and science journalist who, in 1995, published his book Emotional Intelligence. That book helped change how people saw emotions, from something they experience, to something which can be used positively to make us more successful, better leaders and more attuned to the world and those around us. 

Developing ideas previously formulated by psychologists John Mayer and Peter Salovely, Goldman postulated that there are five main components of emotional intelligence, or “EQ”:

1. Self-awareness – being aware of your own emotions and the impact those may have on others.

2. Self-regulation – the ability to control and redirect your emotions in a positive manner, essentially to override the “lizard brain” or limbic system, which, among other things, controls our “fight or flight” responses.

3. Empathy – the ability to understand and relate to others’ emotions i.e. to stand in someone else’s shoes.

4. Motivation – in this sense motivation means intrinsic motivation, namely the drive to meet personal goals such as personal development and purpose-led goals rather than external motivators such as fame and fortune.

5. Social skills – this encompasses skills such as active listening, verbal and non-verbal communication and effective negotiation and persuasion.

Crucially, these are all skills which can be learnt.

The impact of technology on interpersonal dynamics
In today’s world where technology has made in-person interactions between teams, clients, and peers less frequent, significantly shortened the gaps between meetings, thereby all but eradicating any “decompression” time, and led to reported increases in depression, stress and anxiety for those who have become more isolated through a lack of human interaction, unlocking these skills will prove vital.

While the use of video conferencing such as Microsoft Teams and Zoom have made meetings far easier, the screen removes the ability to read what Professor Albert Mehrabian, in his 1967 study Inference of Attitudes from Nonverbal Communication in Two Channels, cited as the single biggest factor in effective communication about attitudes and emotions – body language – which, according to his study, accounts for 55 per cent of how we communicate. This aspect is incredibly difficult to read over video calls. Then take emails (how many of us have been the victim of a misinterpreted emails?) which altogether remove body language and leave only words, which are then left to be subjectively interpreted by the recipient.

However, when we are out in person, figures suggest that we are treating each other less kindly. It is no secret that lockdown had a significant impact on the rise in anxiety, stress and anger with figures recently published by the British Retail Consortium reporting a 50 per cent rise in reports of violence and abuse on shop workers in the past year.

Back to basics and the “Golden Rule”
So what are we to do?

For the individual, recognising one’s own stress levels and taking proactive steps to regulate them before reaching a breaking point can prevent burnout.  Additionally, mastering key social skills can help turn a prospect into a client.

For the leaders, the ability to listen and understand the motivators which truly drive team members particularly with a greater focus on purpose-led business, can be the difference between retaining and nurturing the very best talent or facing a mass exodus.

For those of us in client-facing roles, even the best tech in the world can only go so far; the real USP will be those who have learnt the ability to understand and empathise with clients.

And for those of us who are regularly involved in negotiations and in the private wealth disputes arena, it is learning skills such as rapport building and the power of persuasion (3). 

We also need to be getting out from behind the screens, re-learning and reacquainting ourselves with the very skills that make us human; in-person interactions. That means seminars over webinars, room over Zoom, networking over networking and, brace yourselves, office over home. 

Many readers will be all too familiar with the so-called “Golden Rule” in the context of will writing which was first laid out by Lord Templeman in Kenward v. Adams (1975) The Times, 29 November. However, we would all do well to remember the other Golden Rule; treat others how you would like to be treated.

Footnotes

1,  Statistics at MOJ – Ministry of Justice – GOV.UK (www.gov.uk)
2,  Goldman Sachs Research Newsletter
3,  Robert Cialdini’s Influence: Psychology of Persuasion is a highly acclaimed book on persuasion which sets out six key principles for effective persuasion: reciprocity, commitment and consistency, social proof, authority, liking, scarcity, with Cialdini later adding a seventh principle – unity.