Risk Tolerance

Are Women More Risk Averse Than Men?

Very often the point is made that men and women are different. In the area of investment risk taking, some research suggests that women are more risk averse. Some of this research is referenced in the first of BlackRock’s three-part blog series on gender differences, Men vs. Women: Risk Aversion.

The first point is that the behavioral research generally shows that the structure of men and women’s brains is different to some degree.? Then add the significant physiological differences. This is why it has been said that “Men are from Mars” and “Women are from Venus”. The differences can be reflected in very different beliefs, values, attitudes including to taking risks.

I would like to clarify the difference in terms of risk taking more from the stand point of our DNA Behavior research, which has been independently validated. Our DNA Behavior research shows that the natural instinctive behavior of men and women is generally the same. That is based on natural behaviors as many men will take risks as women. This will be their decision-making starting point. The research is true of other behaviors such as taking charge, being outgoing or social, being empathetic, goal driven or creative. The fact is that there are women out there whose first instinct is to take risks. Similarly, on the other side, there are an equal number of men and women who are instinctively cautious. Again, there are men out there who by nature do not take risks.

However, it is also important to recognize the influence of “learned” behaviors on a person’s personality development or evolution. This is where the substantial differences between men and women can arise because they do have different values and attitudes coming from the differences in how their brain’s are structured and the physiological differences. For instance, what we see is that a woman may be naturally (instinctively) a risk taker but her nurturing attitude to protecting the family will kick through and lead to cautious behaviors. Or, in the case of another women she may be born cautious but have to at times take risks to generate income and capital for the family. But, there will still be an overriding careful attitude to it.

The main point here is not to automatically assume all women will be naturally more risk averse than men.

The same point is true for advisors who think that the men make all of the decisions in doing the financial planning. In some cases the man may lead the process as head of the household and bread winner, but he may not be the power player in making decisions – the women may be far more take charge and direct the decision-making.


Hugh Massie is a Human Behavior Strategist, successful entrepreneur and a leader of the “behavioral awareness” revolution in businesses worldwide for unlocking human potential. He has 26 years of unique and diverse international experience in developing client centered human behavior solutions.


Visit the Financial DNA website to learn more about helping couples improve financial and life decisions through an enhanced relationship with money.

Clients Want Behaviorally Smart Advisors

Why should an advisor become behaviorally smart?

  1. Prospects and clients are looking for it.
  2. 93.6% of financial planning is the behavioral management of the client.

Recent research reveals:

  1. Pre-retirees say an advisor whom I trust and who really gets me would have the most positive impact on their financial outlook.
  2. Nearly half of the men and women surveyed do not feel they have enough financial knowledge to feel confident about making investment decisions.

You need to get your clients and you need to educate them in a way that makes most sense to their own unique financial personality.

The need to objectively uncover natural instinctive behavior is crucial in the financial planning process because this is how clients:

  • More comfortably make decisions
  • Operate under stress
  • Create a framework for life and financial perspectives

Understanding people before numbers is more important than ever.? Your client relationships depend on behavioral awareness.? Its a trend that never really went out of style.



Peggy Mengel ? Vice President, Human Behavior Solutions Advisor at DNA Behavior

Specializing in financial services, Peggy uses behavioral intelligence to help businesses navigate human differences to unlock performance potential. DNA Behavior helps grow behaviorally smart businesses and financial advisors worldwide to increase competitive advantage using the most reliable behavioral discovery and performance development systems on cutting-edge technology platforms.

Visit the Financial DNA website to learn more about building client engagement in the financial planning process.

Why should an advisor become behaviorally smart?

1. Prospects and clients are looking for it.

2. 93.6% of financial planning is the behavioral management of the client.

Recent research http://www.fa-mag.com/news/a-trusted-advisor-leads-to-positive-financial-outlook–survey-finds-15957.html?section=131 reveals:

1. Pre-retirees say an advisor whom I trust and who really gets me would have the most positive impact on their financial outlook.

2. Nearly half of the men and women surveyed do not feel they have enough financial knowledge to feel confident about making investment decisions.

You need to get your clients and you need to educate them in a way that makes most sense to their own unique financial personality.

The need to objectively uncover natural instinctive behavior is crucial in the financial planning process because this is how clients:

? More comfortably make decisions

? Operate under stress

? Create a framework for life and financial perspectives

Understanding people before numbers is more important than ever. Your client relationships depend on behavioral awareness. Its a trend that never really went out of style.

The Money is Moving

Much is written about the current generation of financial advisers approaching retirement and the generation waiting in the wings to step up to fill the advisory gap.

Robert Sofia writes in his article titled Nextgen Is Coming. Are you ready?:

I must acknowledge that Generations X and Y each display distinct traits that advisors should understand and adapt to if they plan to be in business 20 years from now. Here are a few reasons why

  • Generation X and Millennial investors will inherit more than $41 trillion by 2052.
  • Surveys show that 86% of inheritors do not plan to use their parents financial advisors.
  • 29% of wealthy investors are under age 50 and control 37% of investable assets. (Source: Marsten, Cam. The Gen-Savvy Financial Advisor)

Many advisors have built their business models around serving Baby Boomer retirees and pre-retirees ? a strategy that has made sense for a long time, and will likely continue to make sense for a time. Even now, however, the landscape of Boomer wealth is changing rapidly as increasing numbers are reaching retirement age and drawing down their retirement assets.

Furthermore, as Baby Boomers pass away, it is unlikely that their heirs will invest their inheritance with their parents advisors ? unless these advisors provide services that match their expectations.

Bloombergs article titled The Fight Over Financial Literacy notes:

investment personalityMany Americans, burdened by a lack of retirement savings and more than one trillion dollars in student loans, are desperate to know how to make smarter financial decisions. Educators, financial institutions and even some savvy parents have come up with methods to instill good financial behavior. Yet there’s widespread disagreement on the most effective means of teaching kids about money. On one issue most agree: Too many Americans lack the basic knowledge to manage household finances well.

Many Generation X and Y investors have watched the plunging financial markets destroy their parents’ retirement plans; requiring them to continue working well past their longed for retirement age and dont want to be in the same position when they reach retirement. Therefore they may be very risk averse.

What does all this mean for the new generation of financial advisers? Are you prepared to navigate the different behavioral styles and emotions of your generation X and Y clients? Independent research shows that 93.6% of your role is managing client behaviors.

  • Gen X are a well-educated generation with many having qualifications. They tend to be resourceful, self-reliant and often quite skeptical of authority. They will quickly see through an adviser who is product only focused and not prepared to get to know them. But generally speaking they want to build relationships.
  • Gen Y are not noted for being loyal to a particular brand and the speed of the Internet has led this Net savvy Generation to be flexible and ever-changing in many areas of life including where and how they are communicated with. Not all business will be conducted in offices; the new generation of investors are time poor, they conduct their businesses on the run; in hotel lobbies, airport lounges, homes and expect their advisers to be able to do the same.
  • They expect great flexibility from service providers and are likely to change advisers even more frequently if trust cannot be built.
  • The next generation of financial advisers will need to be behaviorally smart. Understanding the importance of engagement with their client peers will be fundamental to ensuring they retain the client.
  • Having the flexibility and skills to communicate with the new generation of clients via social media will be key. But all communication will need to be honest and meaningful to gain their trust.


Carol Pocklington is a Human Behavior Solutions Analyst at DNA Behavior, assisting with the research and development of behavioral products. DNA Behavior helps grow behaviorally smart businesses and financial advisors worldwide to increase competitive advantage using the most reliable behavioral discovery and performance development systems on cutting-edge technology platforms. Solutions are delivered in the areas of client experience management, financial personality management and human capital management.

Visit the Financial DNA website to learn more.

Are You Successful And Productive? 3 Keys to Becoming a Productive Adviser

The role of a financial adviser is to provide clients with advice on financial matters, making recommendations on ways to best utilize their money, ensuring they are aware of and understand the direction to be taken that best meets their clients needs. The next part of this statement might be to sell product and close the deal.

Being productive also means being creative, helpful, valuable, and practical and so much more. If the measure of being a successful adviser is to be productive how important is it to really understand all aspects of your prospective client’s life?

Stacey Haefele makes an interesting observation in her article in the Financial Planning Newsletter about getting to know your clients,? titled Targeting Wealthy Clients and Understanding the Source of their Wealth.

Are the people before you hardworking, average-earning lifelong savers? High-flying corporate
executives saddled with a vested interest (and stock position) in a single company that may
never love them back? Or are they small business owners or entrepreneurs whose personal finances
and business finances can be hard to distinguish? Did they inherit all their wealth -- or,
perhaps, just enough that they can't quite quit altogether?

A client's source of wealth is an incredibly informative data point. It is key to understanding
a client's values, work ethic, attitudes toward risk and investment personality. It may even give
you a clue as to how clients might work with you as an advisor: Will they need an asset manager
or a shrink?

Clearly the starting point in order to become a successful and productive adviser is to know and engage with your client right from the start. Charm, inspirational presence and great communication skills together with a high level of competencies do not make a productive adviser. Understanding and learning to navigate the different behavioural styles and emotions of your clients is the key starting point? Independent research shows that 93.6% of your role in becoming a productive adviser is through managing client behaviors.

Through understanding client behaviors:

  1. Successful and productive advisors will be able to choose what’s right for their clients rather than what’s most profitable.
  2. Successful and productive advisers will consider the big picture of their clients life, dreams, plans, family and financial situation before advising on products or recommending specific actions
  3. Successful and productive advisers follow a process for discerning their clients needs and offering recommendations.

Successful and productive advisors make a difference in clients lives.



Carol Pocklington is a Human Behavior Solutions Analyst at DNA Behavior, assisting with the research and development of behavioral products. DNA Behavior helps grow behaviorally smart businesses and financial advisors worldwide to increase competitive advantage using the most reliable behavioral discovery and performance development systems on cutting-edge technology platforms. Solutions are delivered in the areas of client experience management, financial personality management and human capital management.

Visit the Financial DNA website to learn more about building the relationship with your clients in the financial planning process.

Product Release Notes: DNA Admin System Update October 25th, 2013

The following features and updates have occurred at October 25, 2013 between 2:00am US Eastern Time and 5:00am US Eastern Time.

Behavior Highlights button on Client Detail Page:

A marketing theme we have recently adopted is DNA Behavior, putting behavior at the fingertips of your business with this feature we have quite literally achieved this. With one click of your mouse, you will now get the high level overview of a clients Communication DNA and or Natural Behavior results. This is now the quickest way to see key details of a client or employees behaviors such as: Risk and Decision Making Groups and scores, 2 strongest factors and Primary and Secondary Communication styles with the Communication keys.

This feature will be made available automatically to every account inside the DNA Administration System.


Financial Talent DNA Comparison Report:

Compare 2 individuals behaviors in a one page Financial DNA Talent report format. Often referred to as a couple overlay report, this report is the quickest way to compare the behaviors of 2 individual on 1 easy to use page.

To familiarize you with the DNA Talent Report format, we recommend reviewing the interactive Financial Talent DNA Report walkthrough for the individualized report: Available here.

Contact support@dnabehavior.com to have this feature turned on for your account.

Communication DNA Group Report:

What percentage of your clients are goal-setting focused compared to information focused?

The new Communication DNA Group Report provides managers with the information they need to review their entire customer base and employee bases communication style. This new feature inside the Facilitation Tools menu allows managers to produce a report in summary format of an unlimited amount of individuals behaviors.

Contact support@dnabehavior.com to have this feature turned on for your account.


Russian Language released for Financial DNA Natural Behavior:

We are pleased to announce that Financial DNA is now available for the Russian Language. Included in this launch are the 5 page Financial DNA Summary and 1 page Financial Talent DNA Reports.

This feature will be made available automatically to every account with access to these reports inside the DNA Administration System.


Updated instructions for the Communication DNA Discovery Process:

We continuously review feedback on the questionnaire process from our users. In this product release, we are implementing some of this feedback to make the discovery process more clear and easy for the participant to complete. Below are the updated instructions for Communication DNA.

The Communication DNA Discovery Process provides detailed insights into your communication style and your preference for how you wish to be communicated with by others.

  1. Directions: This is an assessment, not a test. Therefore, there are no right or wrong answers.
  2. Please respond quickly on the basis of how you wish to be communicated and interacted with by other people. Avoid agonizing over your choices.
  3. From each group of three phrases (with background pictures), choose the one option that indicates how you MOST like to be communicated and interacted with by selecting the button below this option marked Most.
  4. Then choose the option that indicates how you LEAST like to be communicated and interacted with by selecting the button below this option marked Least.
  5. REMEMBER: In each group you should select only one Most, one Least and leave one phrase unmarked.
  6. The key to an accurate assessment is YOUR willingness to be realistic about your communication style.
  7. Work quickly by yourself without help from others. Avoid agonizing over your choices. At times you may find some of the choices difficult. This is the intention as it will lead to a more accurate and reliable reporting of your communication style.
  8. Allow up to 5 minutes to complete this assessment.

Updated instructions for the Natural Behavior Discovery Process:

We continuously review feedback on the questionnaire process from our users. In this product release, we are implementing some of this feedback to make the discovery process more clear and easy for the participant to complete. Below are the updated instructions for Natural Behavior.

  1. Directions: This is an assessment, not a test. Therefore, there are no right or wrong answers.
  2. Please respond quickly on the basis of your natural instinctive behavioral traits regardless of whether you consider them good or bad.
  3. The focus should be on who you are and not on who you want to be or who you believe you have become in specific life, workplace, family, community or financial settings. The key to an accurate assessment is YOUR willingness to be realistic about your natural behavior.
  4. From each group of three phrases, choose the one phrase that indicates how you MOST naturally like to operate, make decisions and interact with others by marking the box next to the word under the heading Most.
  5. Then choose the one phrase that indicates how you LEAST like to operate, make decisions and interact with others by marking the box next to the word under the heading Least.
  6. REMEMBER: In each group you should select only one Most, one Least and leave one phrase unmarked.
  7. Work quickly by yourself without help from others. Avoid agonizing over your choices. At time you may find some of the choices difficult. This is the intention as it will lead to a more accurate and reliable reporting of your natural behavior.
  8. Allow up to 15 to 20 minutes to complete this assessment.

Contact support@dnabehavior.com to learn more about these features and others in your account.

Where is the Real Value of the Advice Advisors are Giving?

Building a relationship is the basic requirement that enables a trusted exchange of information to take place. Such a trusted relationship becomes even more critical when the information to be shared touches sensitive or personal areas of the lives we lead. Personal finance is historically one of the top no go areas for dinner table conversation. Although, there are people who will always tell you snippets of what they want you to know.? And yet how often do clients openly share details of their financial position with financial advisers just because they are financial advisers?

Real Value of AdviceVery often the client will share the financial basics because that is easy but not the deeper life issues. In reality these life issues are driving the real financial concerns and questions they have. It is these deeper issues that need to be discovered ? the information is hard for advisors to discover and hard for clients to tell you about.

Here are a few thoughts of what advisors really need to know and what clients need to feel safe in talking about:

  1. What do you know about the clients bucket list -? the things they want to do before being too old to do them?
  2. What do you know about past mistakes the client has made because of poor financial decisions?
  3. What do you know about the clients family financial history?
  4. What do you know about the clients decision making style; do you know to what degree its driven by instinctive behavior,? emotions, knowledge, peer pressure or something else?

Risk profiling that is singularly directed towards investments wont answer these important questions. However, a behaviorally smart adviser who seeks to holistically understand the clients complete financial personality would be far ahead of the traditional advisor or investment manager. Advisers should position themselves to be selected by clients who want them to recognize and navigate their different behavioral styles and emotions. If advisers really want to build relationships and therefore their business they need to realize that independent research shows 93.6% of their role is managing client behaviors.

Tony Vidler in his article Why Sales Skills Matter More Than Ever comments on the findings of the July 2013 report titled Econometric Models on the Value of Advice of a Financial Advisor, by Claude Montmarquette and Nathalie Viennot-Briot:

...clearly there is a fundamental requirement for the professional to have strong technical competency
in order to be able to use sales skills effectively and ethically ? the adviser has to know why a particular
course of action is sensible before attempting to convince clients to take it! But apparently, the real
value advisers create comes from getting clients to change directions or habits. That requires the
strongest skills imaginable.

The face of financial advice is changing. The financial industry is asking questions about where the next opportunities are; how are advisers going to generate business, etc.. All valid concerns and all easily answered; financial advisers need to become more behaviorally smart, they need to be open to different right brained approaches if they want the best possible outcome for clients.

Now is a watershed moment in the world of financial advice. With the advent of tighter regulatory requirements, competition and the ever changing economic landscape,? the real response to these environments is to focus on knowing who your clients are and building strong, effective and long lasting relationships with them.? They in turn will become ambassadors by placing value on and talking about the client centered approach you have to providing them with advice.



Carol Pocklington is a Human Behavior Solutions Analyst at DNA Behavior, assisting with the research and development of behavioral products. DNA Behavior helps grow behaviorally smart businesses and financial advisors worldwide to increase competitive advantage using the most reliable behavioral discovery and performance development systems on cutting-edge technology platforms. Solutions are delivered in the areas of client experience management, financial personality management and human capital management.

Visit the Financial DNA website to learn more about building the relationship with your clients in the financial planning process.