Christian Heinen and Fèmy Mouftaou (IQ-EQ Luxembourg): Emotion in Financial Services

Christian Heinen and Fèmy Mouftaou, respectively Managing Director and Chief Commercial Director of IQ-EQ Luxembourg, discuss the group’s rebrand and strategy, as well as the growing importance of emotions in investment processes.

 

What value did the IQ-EQ rebrand add?

Following several acquisitions, SGG Group – as we were previously known – brought together a large number of brands and employees worldwide. We needed to unify the various legacy brands and teams under one global umbrella. In acquisitions involving the combination of several entities, the most important thing is to harness the group’s strengths and provide real added value. So, after a rigorous research-based process involving extensive client and staff consultation, the IQ-EQ brand was born, reflecting what is needed to succeed in our industry: a combination of intellectual and emotional intelligence; of technical expertise paired with a deep understanding of our clients’ needs. The name IQ-EQ is bold, different, and reflects the way we serve our customers. This rebranding also brings our employees together with a set of shared values as well as a common visual identity. The emotional dimension remains present on a daily basis as we encourage sharing and exchanging in order to create a vibrant corporate culture our employees can identify with.

“The EQ part in dealing with asset managers and their investors will remain a differentiating factor for service providers”

What are the links between finance and emotions?

With emotional finance theory and unconscious investor bias hot topics in the industry right now, recognition of the link between finance and emotions is greater than ever before. Particularly within the alternative investment space, emotions and emotional intelligence are arguably the most important determinants in the investment decision-making process. Emotions and unconscious thought play a significant role in investment activity, and recognition of these factors promises to expand our understanding of financial and market behavior. Similarly, financial professionals with high EQ will better appreciate and understand the array of causes affecting performance, including but not limited to financial results. Emotional intelligence also has a big impact on service delivery within the finance industry. One example from our day-to-day service provision where EQ really makes a difference is in handling regulatory requirements. European and Luxembourgish directives govern the financial sector in an increasingly restrictive way, requiring investors and intermediaries to answer many specific and demanding questions. If we carry out our KYC and AML compliance processes mechanically, without explanation, our clients may not understand why we’re asking for so much information and documentation and become irritated. By taking the time to explain why this information is necessary, we’re able to keep our clients happy and comfortable in the knowledge that they are in safe, compliant hands.

How do you see IQ-EQ and the market evolving in the coming years?

At present, alternative assets are enjoying double-digit growth worldwide, and Luxembourg occupies a prime position to continue to benefit from this trend. That being said, the sector must pay close attention to sustainability and social responsibility. There is a growing number of infrastructure projects requiring significant capital but there is also an increasing focus on environmental, social and governance (ESG) criteria and reporting. Fund managers and administrators must be ready to meet investors’ ESG needs. In terms of IQ-EQ’s future: as regulatory changes and evolving client demands continue to impact our business, our ability to evolve our offering and procedures remains a strength. For us, our future focus is clear: keeping up with the latest know-how is one thing, but true emotional understanding of asset managers and investors will remain a differentiating factor for service providers.

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