Derek Hagen, CFA, CFP®, FBS®, CFT™

“True financial well-being comes when emotional awareness and financial knowledge work in harmony.”

-Carol Anderson

Technical skill gets you in the door. Emotional skill keeps you in the room.

Where the MQ Formula Came From (and Why It Matters Today)

Money Quotient founder Carol Anderson recognized something many advisors had overlooked: financial literacy alone isn’t enough. Knowledge is necessary, but not sufficient. Many people know what to do: save for the future, pay off debt, avoid overspending, and yet they still struggle to follow through.

That insight led her to develop the formula:

EQ + IQ = MQ

Emotional intelligence (EQ) plus technical intelligence (IQ) combine to create Money Quotient (MQ), the quality of financial well-being. And EQ comes first.

How EQ and IQ Together Create Financial Well-Being

For individuals, the formula highlights why information alone doesn’t lead to action. Financial literacy provides the “what” and “how.” But emotional awareness—our relationship with money, our identity, and our lived experiences—provides the “why.” Without both, financial well-being remains incomplete.

For professionals, MQ represents the quality of advice. Yes, technical expertise is essential. But just like clients, advisors who rely solely on IQ fall short.

The ability to listen deeply, help clients feel understood, and connect empathetically are equally important. Without that, even brilliant advice goes unheard.

In other words, both IQ and EQ are required for client well-being.

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The EQ/IQ Grid

Think about different types of advisors through the lens of our EQ/IQ grid:

The Robot: High IQ, low EQ. Knows the technical side inside and out, but can’t connect with clients. Advice often falls flat—and this kind of advisor risks being replaced by AI.

The Great Listener, Bad Planner: High EQ, low IQ. Connects well, builds trust, but lacks the technical expertise to deliver solid advice.

The Wrong Profession: Low in both IQ and EQ. Simply put, not qualified.

We can use this grid to highlight who the best advisors are. Technical expertise, the IQ component, has become table stakes. Without sufficient IQ, those advisors aren’t qualified to be advisors.

Those who passed the table stakes test are qualified to be advisors. These advisors have strong technical knowledge but weak EQ. Their advice may be correct, but it doesn’t connect and therefore doesn’t get implemented.

What’s left is the complete advisor. This is where IQ and EQ work together. These advisors combine technical expertise with emotional intelligence, helping clients feel understood while delivering advice that gets acted on.

How Advisors Can Grow Both IQ and EQ

IQ and EQ are both skills, not fixed traits.

Programs like the CFP® certification strengthen technical expertise.
Training from organizations like Money Quotient helps advisors grow their EQ by improving listening, empathy, and communication.

The result is higher MQ; advice that not only makes sense, but gets implemented.

FAQ: The MQ Formula for Meaningful Advice

What does EQ + IQ = MQ mean?

It’s Money Quotient’s formula: Emotional intelligence (EQ) plus technical intelligence (IQ) equals MQ—the quality of advice and financial well-being.

Why isn’t financial literacy alone enough?

Knowledge provides the “what” and “how,” but emotions provide the “why.” Without EQ, even accurate advice may not connect or get implemented.

What does EQ add to financial advice?

EQ adds empathy, listening, and presence. It helps clients feel understood, which builds trust and improves follow-through on recommendations.

Can an advisor rely only on IQ?

High IQ without EQ leads to technically correct but emotionally flat advice—clients may resist or ignore it. Both skills are required for impact.

Can EQ be developed like IQ?

Yes. IQ grows through certifications and training, while EQ improves with practice in empathy, reflective listening, and communication.

Want to Learn More?

Money Quotient trains financial professionals in the True Wealth process and helps them implement the concepts into their practices. The first step is to learn about the Fundamentals of True Wealth Planning.