Behavioral Finance

Promote Financial Well-Being Through Behavioral Science

Promote Financial Well-Being Through Behavioral Science

This article first appeared on Nasdaq.

I find myself having more conversations about the application of behavioral sciences methodologies across industries, especially in the financial services world. Financial services leaders are wondering about behavioral science applications, how they work, the investment needed and how they impact, or not, their bottom line.

Given my vantage point at the nexus of behavioral science and the financial world, it is not a hard conversation for me to have. It’s encouraging to see how industry leaders are taking a hard look at the way they do business.

So much has changed in the wake of COVID-19, including remote work, staff losses and constantly changing business opportunities. These new circumstances are forcing industry leaders to review their offerings and strategic plans from a new position.

Integrating be-sci into the financial realm

Financial services firms still have a long way to go in delivering the level of customized experiences most clients require and expect. The financial executives I’ve been speaking with readily acknowledge such. But what they are missing so far is that unique behavioral insights – assuming they are reliably and objectively gathered – can have an enduring impact on a client’s financial well-being.

Simply put, a behavioral sciences methodology, starting with a financial personality discovery, delivers a deeper understanding of how people behave and make life decisions, especially about their finances. Without this specific insight, financial advisors are basing long-term planning decisions on: (i) observations learned in a few meetings, (ii) asking a limited range of questions which are usually biased to get desired answers, and (iii) demographic data or “persona category” information.

Extracting information about a client’s long-term plans is a key part of the advisory process, as “right data in, means right data out.” Importantly, advisors should have a holistic view of each client’s financial personality. In order to be able to advise, coach, and support a client through every life and financial event – especially the unanticipated ones – advisors should be accessing significant amounts of data about clients.

Without this depth of insight, the gap between financial advisors and their clients can become difficult, if not impossible, to bridge. Or both will proceed with sub-optimal strategies and solutions, which also means achieving sub-optimal outcomes, financial and otherwise.

With the application of behavioral science principles, financial services firms can deliver experiences that improve their customers’ financial choices and decisions, and therefore their overall wellbeing.

Don’t reinvent, partner with expertise

To return to those conversations with financial executives: Intentionally applying a behavioral sciences approach at first appears too big a leap for many financial services firms. In such cases, the common denominator is that they are not seeing the larger, value-added purpose. So, internal resistance to take-over.

It’s interesting how little is known about the use of behavioral science methodologies in organizations. Many assume they need to set up a full-scale in-house behavioral sciences team and build proprietary technology. Others trawl their staff to see who has a degree in psychology.

The reality is the use of an existing expert organizations to deliver these functions for you. The market now offers validated, scientific behavioral discovery and application systems to help advisors understand how clients make financial decisions, including under pressure (a crucial element). Further, using that data, such systems provide the keys to communicate and manage each client uniquely.

We’re living through a case study

Many practice managers and financial advisors forecast remote working continuing well into the future. And permanently in some cases. A valid concern is the loss of the “personal touch” of face-to-face meetings.

The gathering and robust deployment of financial personality data mitigates this loss. In addition to revealing insights about client decision making and communication style, their emotional trigger points are revealed. This enables advisors to best navigate tailored client solutions via platforms like Zoom, Skype, or GoToMeeting.

In-room feelings and intuition lost or missed can be replaced or improved through predictive insights about how the client will behave when triggered by market or life events. Advisors that quickly see a behavioral approach will focus the planning process on what the client truly needs and desires. Trust is accelerated via clarity and enhanced communication. Results improve and the process is more cost-effective.

Best: Behavioral insight delivers data that won’t change over time. Which means the data and insight placed in advisor/client hands can pay dividends in perpetuity.

The road ahead is paved with behavioral insights

Advisory firms that adopt a behavioral sciences approach are more likely not only to have better client outcomes, but also eventually earn a greater market share. One reason for that is, through expanded access to behavioral insights, many firms grow client services and practice management opportunities.

Examples of expanded Client Services opportunities through the lens of behavioral sciences: Individual Wealth Mentoring of Clients (Behavioral Coaching), Couple Dynamics, Family Succession Planning, Family Member and Employee Talent Reviews, and Planned Giving Strategies. Similarly, some Practice Management opportunities via a behavioral sciences “plug in:” Coaching Advisors on leading clients and customizing communications, Serving Clients in Teams, Hiring the Right Talent, Advisor-Client Match and Benchmarking, Behavioralizing Big Data for Customizing Communications, Investor Suitability Management based on Advisor and Client Styles, Rogue Identification, and Practice Succession Planning. The possibilities are actually endless.

These, again, are chances to improve the quality of the firm while also growing its revenues.

Making Behavioral Science Effortless in Workflow

Making Behavioral Science Effortless in Workflow

This article first appeared on Nasdaq.

When advisors and clients relate well and understand how to manage each other’s behavioral and communication differences, those solid foundations lead to repeat business and overall success.

Imagine heading to a meeting with a client and being able to use your smartwatch or other device to take a quick glance to remind yourself of their innate behaviors. Those revealed by the 10-minute assessment they took early in the advisory relationship.

You’d quickly refresh your knowledge of validated ways to best communicate with them. A smoother, more focused meeting. Perhaps quicker. And with improved outcomes.

Visualize knowing in advance, for instance, that this client values work-life balance and won’t budge from goals they have to support their lifestyle. Think about how important it would be to have access to client insights as you step out of the elevator and greet your client.

An insightful road map

Many of us can’t recall our own natural behavior when we are under stress, never mind trying to recall that of our client. But a quick glance at discovery report highlights provides these prompts:

You are motivated by out-of-the-box thinking and brainstorming. On the flip, your client who needs the big picture, action plans and logical key points.

You’re reminded to go into the meeting knowing how to manage the differences between you, including: Dial back your creative thinking and focus on the analytics and rationale, while remaining levelheaded
The world of advice is changing rapidly. Think back over the past few months and consider how often you’ve found yourself acting more as a coach-mentor than a financial advisor.

Robust info revealed in practical ways

Increasingly, and though they may use varying language to express it, advisors are inquiring how to foster this transition to coaching or mentoring.

All acknowledge their clients are smart and have a pretty good handle on their wealth creation in stable times. But they recognize we’re all a bit more emotional and not as consistent in decision making during tumultuous times.

My guidance: Get to know your clients’ natural behavior. It won’t change over time, but under pressure some aspects of their financial personality might cause a “behavioral flip” – so named by behavioral insights guru Hugh Massie – and will need to be managed. (Behavioral flip: Demonstrating behavior that seems to run counter to everyday, no-stress or low-stress behaviors.)

This is not some futuristic thought bubble; this behavioral insight is available now and can be used on any device via a simple integration. And that last point is one I get asked about a lot. Understandably, advisors are busy doing their core work and don’t need an add-on, for lack of a better term, if it’s not a quick and seamless process, including the time involved to get up to speed.

Leverage existing behavior data

Being able to reference and be guided by robust financial behavior data creates curiosity as clients see how empowered they are as they fully understand their inherent decision-making and communication style. This revolutionizes the advisor-client relationship and puts you and your client on the cutting edge.

Get an even better grasp on how to run a client meeting built on actual data and behavioral insight.

Understanding behavior satisfies know-your-client standards – without having to laboriously read piles of client bios – and ups the ante in terms of outcomes on all sides of the relationship.

In Isolation: Stress and Revelations

What behaviors have surfaced in your personality during isolation that have surprised you? What about your partner and family?

Never before in most of our lifetimes have we as a global family been subjected to isolation, separation, loneliness, and enforced seclusion on this scale. Never before have our rights to make daily choices been removed. It’s inevitable, therefore, that areas of our behavior will surface that otherwise haven’t been obvious before the coronavirus lockdown.

All kinds of changes to environments can produce deviations in behavior, but add to these restrictions to movement. You can’t get out of the way of other people’s behaviors and that’s a recipe for disaster.

Let’s take a light-hearted look at possible answers to these questions. This is not a counseling session; rather, a deep dive into behavioral differences.

A case study for perspective

The Johnson Family (names have been changed) – Dad, Mum, two sons, and a daughter. Dad Tom runs a successful leadership training consultancy. Mum Fiona is a medical clinic receptionist. Eldest son Junior works for the government and runs a department. Son Kevin is a social worker, focusing on family issues. Daughter Susan is a marketing consultant and runs her own business.

Some of the more unsettling traits that have surfaced during isolation have caused challenges but have also served to enable the family to recognize the importance of understanding and managing the differences in their behavior.

Example: Tom, after just a few days of isolation, decided that he would head to his office as no one would be there. He said he would grab some take away food on the way back and fill up the car with gas. Tom had always been a spontaneous risk-taker. He could recognize a good business deal and was prepared to back his judgment and take risks when necessary. However, isolation had proved difficult for him and he started to rebel against it and become unfocused and overconfident. He thought he knew best.

Kevin was all for the challenge of getting out of isolation and said he’d go along for the ride. As a social worker, Kevin was engaging and trusting. He could talk to anyone and put them at ease. He knew he was inclined to become too empathetic with his clients, but it worked for him and them in terms of finding a solution to their difficulties. But after a few weeks of isolation, he was trying to talk himself and his family into breaking the rules. He became emotional and somewhat immature in his arguments.

Fiona, on the other hand, pointed out all the issues raised both in the media and from her experience at the medical center as to why her husband’s idea was foolish and potentially dangerous to the family. She insisted they all be compliant and follow the rules. Against the barrage of talking from her spontaneous, sceptical, outgoing, creative family she found herself becoming passive and hesitant and losing her inherent ability to be practical and diplomatic.

Junior sat on the fence – on the one hand, he wasn’t entirely in sync with what the news reports said about the need for strict isolation and yet questioned his father’s impulsive behavior. He ignored Kevin’s loud, effusive pleas to let them go. Not because he didn’t love his brother, but because he knew he was too emotional and trusting.

Susan hid the car keys, as she could see the family dynamics breaking down. She headed to her laptop to find a solution online to help the family before it deteriorated into all-out war. As Susan became impatient and critical of the way her father was flouting the rules, her brothers, infuriating her for no particular reason other than they were her brothers, she watched with a deepening concern as her parents’ behavior escalated in ways she’d not seen before.

Susan realized that in this enforced and confusing setting her family was losing perspective. She could see that, until they truly understood what was happening and why they might not get through it. She feared they wouldn’t surface from isolation intact as a family unit.

The turning point

Susan had completed some marketing work for DNA Behavior International. As part of the contract, she completed a discovery process the outcomes of which were used to help her integrate quickly with the team.

As she pointed out to her family, the things that she was seeing in their behaviors and her concern about how fractured the family was becoming, they began to realize they were in trouble. Knowing that her behavioral style was that of an initiator, she insisted the family complete their own discovery online, knowing they would receive the outcomes in real-time.

Susan watched as they read their reports and saw the depth of insight they revealed. Tom realized that his spontaneous and risk-taker factors that helped him build a successful business were now showing up as impulsive and unfocused. Fiona, on the other hand, recognized she had retreated into compliance just to keep the peace and had allowed her consistent approach to issues, and her experience to be usurped by others’ behavior.

Junior could see he needed to get off the fence and use his ability to question and reason to influence others’ behavior through quiet, focused conversation. Kevin was the answer to pulling his family together. He put his arms around them (metaphorically), reminding them of the strong caring family unit they were before the pandemic.

Susan watched all this and took on the role of thinking imaginatively of how they could get through isolation as a family without wrecking themselves. She asked DNA Behavior to run a family team report so they could get a deeper understanding of how to survive the isolation by understanding their differences.

As DNA Behavior is a remote-working business, they talked to the family online about their relationships. A DNA Behavior consultant was able to give them pointers on how best to flex with each other when or if inappropriate behaviors surfaced again.

The family is now armed with their inherent behavioral factors, a family team report, and knowledge of their communication styles. They know environment impacts behavior and communication, AND now they are confident of exiting home isolation and remote work intact.

Be like the Johnsons…

We’re here to help. Reach out to us so you can understand the dynamics of your household during this season of isolation.

Begin by completing a no-cost, no-obligation DNA Behavior discovery. In conjunction, book a no-cost, no-obligation consulting appointment with one of our pros. You’ll gain new insights and skills that will serve you in isolation and when it is just a distant memory.

In conjunction, book a no-cost, no-obligation consulting appointment.

Does Remote Working Fit with Who You Are?

Does Remote Working Fit with Who You Are?

If you have a personality that needs connection with others, how do you cope with remote working and virtual connection?

Further, do you have the behaviors, traits and skills to flourish away from a traditional work environment?

Will your manager know enough about you to support you during this time?

With observations like these, it’s obvious remote working and virtual connection are not necessarily a good fit for everyone.

Practicing what we preach Looking at my own team has been an interesting exercise. With the use of our Business DNA Behavior Natural Discovery process – used and applied from the point of hiring forward – I’ve always been able to have my team work to their strengths, wherever possible, slotting them into positions that set them up for success. But in this current pandemic, I’ve taken a longer and more in-depth look at their Business DNA reports. Based on what I see in their discovery profiles, some team members will welcome the isolation and I may well have to ensure they aren’t working excessive hours and reducing their interaction with their colleagues or the teams they lead. Others will miss collaboration with colleagues via closer proximity. Not just because they enjoy socializing, but because of their creativity; they rely on group interface to inspire the work they do. One key insight Business DNA Natural Behavior Discovery provides is a clear pathway to understand how individuals respond to their environment. This insight helps me keep an eye on their frame of mind. Believing that each person is responsible for their own accountability and self-motivation, I asked them to review their own Business DNA report as we moved the business to total remote working. This open and honest review has enabled us to see where we need to invest in the emotional and mental well-being of our people. And for our employees to gain a greater understanding of their own needs as this pandemic drives us all into unchartered waters. Know your people You may have cohesive, well-oiled business teams now but being forced into remote working without a knowledge of how this would impact them and your business can be worrisome. Remote working requires a significant amount of communication to keep everyone engaged.
How you do this depends largely on the investments you are willing to make, PLUS a clear understanding of what each individual team and team member needs:

  • Who needs motivating?
  • Who needs more empathy?
  • Who is not self-reliant?
  • Who needs reminders to meet deadlines?
  • Who needs interaction with colleagues via video links to build creativity?
  • Who needs to be reminded to exercise and lift their head above the work?
  • Who is in danger of becoming too reserved and withdrawn?
  • Which of the team leaders is best placed to support, encourage and coach?
  • How well will individuals return to working in the office?

I have introduced Microsoft Teams to our team. Think of it as an efficient chat function with facets of project management. Already they are chatting in real time. Perhaps most importantly, they are giving each other encouragement and input. I am not policing them (they cc me into chats which is nice). I don’t need to be overbearing with oversight because I believe that it is my responsibility to provide them with any tools they need to do their job, but more importantly keep their minds and emotions healthy.

The Psychological State of Teams & Clients While Isolated How our team can help your team. DNA Behavior is well-placed to help you manage the well-being of your people. It might be as simple as understanding which of your people are concerned about using video conferencing. It could be a loss of efficiency from those not used to remote work. Or as complicated as ensuring naturally reserved individuals don’t become reclusive. With the insight of a Business DNA Natural Behavior profile, answers to these and other behavioral questions will inform strategies for caring for your team(s).

With quality behavioral insight you can respond quickly and appropriately to unusual reactions from colleagues. • You will know how to manage the usually placid one who becomes argumentative.

  • You will be able to support the normally confident one who senses they are losing respect from colleagues because they aren’t as familiar with technology as others.
  • You will know which of your customer-facing people could freeze at the thought of using phone or video links to connect with customers.
  • Add to that a customer who is concerned about the current global environment.

Behavioral Knowledge is the Key Now more than ever is a time to encourage all staff and customers to complete the Business DNA Natural Behavior Discovery process. It only takes 10 minutes. It can be completed on any device. Business DNA provides real-time in-depth reporting to both the customer and the employee on how to communicate and interact with one another. And much, much more. Reach out: We will work with you to share our knowledge and suggest which of our tools would most benefit you.

For a start, complete your own discovery at no cost and with no obligation. Likewise, schedule a no-cost, no-obligation consultation with one of our pros.

Your Intuitive Supplement for Online Business

Your Intuitive Supplement for Online Business

It is important for advisors to stay in regular communication with their clients in normal times but even more so in challenging times when we are forced to work remotely.

A new normal: Advisors and/or clients will not want to meet in person as often when the social distancing restrictions loosen up. Everyone has gotten used to working at home and being more physically distant.


If you’ve only met your clients a few times, how effective will you be transitioning from “face” to online meetings?

Will you be as confident in your intuitive radar, picking up a client’s emotions when interacting online?

Do you actually know enough about the client’s financial behavior and have predictive insights into their likely reactions to market movements to be able to speak to them via video links as effectively as you might have previously done in face meetings?

What do you really know about your client’s financial behavior and communication style, particularly in high pressure circumstances? What about your own style?

Not in person, not the same

From working with clients remotely since 2001, the problem I see is that, while online meeting systems like Zoom and Skype may give you a visual on the client, they will not fully tell you the truth about their feelings and reactions – wittingly or unwittingly.

Advisors often tell us their intuition in client meetings is stronger than a robust behavioral assessment tool. Nevertheless, we have always maintained that at any time, combining intuition and measurable financial behavior data is the winning formula. That approach helps ensure the “brain speak” is never wobbly and the financial behavior reporting provides consistent, reliable natural guard rails.

So, when the direct physical line to the client is cut off – it makes the use of an independently validated behavioral tool all the more important to make up for the lost opportunities to leverage intuition.

Your cheat sheet: Validated insights Here is an example of a DNA Behavior report that gives you a deep dive into both financial behavior, communication style and market reaction. Bonus: It’s delivered, in real-time, to any device you use.

Your Financial Behavior Report

Even if an advisor is confident and focused in in-person meetings, don’t assume that confidence is there on conferencing platforms and other forms of remote communication. We all react and behave differently to various forms of communication, both consciously and unconsciously. You just have to see some of the Zoom gaffes and parodies being passed around online to see this.

Just as important: Your client won’t necessarily be able to read you well or they might not present themselves to you in quite the same way when not face to face. This leads to difficulty in interpretation.

Are what clients saying corresponding to what they actually want or need? And are you relaying what you intend? Do you have the validated insights to know the difference both for you and for your client(s)?

Remote + your secret insights weapon

Conferencing platforms, social media and other means of communication are great levelers. So how do you bridge the gap and translate accurate, quality “face” conversations into this era of distancing and remote communication, using various forms of technology?

Well, you’ve got to Get Below the Surface (link to Part Two of the article), and that’s what we’ll talk about Next. Keep reading (link to Part Two of the article).

Get Below the Surface When Going Remote

Get Below the Surface When Going Remote

(If you missed Your Intuitive Supplement for Online Business, it would be helpful for you to read that first.)

With increasing use of remote communications, during the coronavirus pandemic and beyond, it is important for advisors to ensure regular client communications are reliable and effective, no matter the communication platform.

This is an added reason to get below the surface, using a validated behavioral insights tool to “check” your own communication and that of your client(s). It’s also an opportunity to introduce a proven point of difference into your advisory business.

Your unique selling proposition – one of your points of differentiation and added value: A behavioral finance technology that will allow you to know your client quickly at a deep level and give you an immediate supplement to your intuition.

Have every client complete the Financial DNA Natural Behavior Discovery process online. In just 10 minutes, you will have their financial personality at your fingertips.

This will reveal a range of important factors that will help you deliver quality – in person or remotely, at times of crisis, like the current isolation, or not.

The depth of insight you/your client will get

  1. How the client wishes to be communicated with. Know in advance how best to manage your communication style to theirs. In these troubled times and beyond, this customized communication approach is vital. Example: If you are a confident speaker, you may find your client’s communication style requires you to dial down your confidence, which might seem aggressive to them.
  2. How likely the client is to panic and want to shift financial life goals and sell at the wrong moment. From their financial personality, you will see whether this approach of panic and flight is momentary or inherent. In either case, you can mediate and keep the client on track and focused on life planning goals.
  3. You will see in-depth how best to behaviorally manage your client’s emotions. Money is a huge source of emotional energy. Add market volatility and a major global pandemic scare. This is a recipe for panic and poor decision making. With behavioral insights in hand, you have a depth of insight to manage and advise in this climate. (Not to mention knowing and understanding your own reaction to the current climate.)
  4. Moving from financial advisor to financial counsellor or coach. These uncertain times require advisors to lay down their “sales pitch” and become counsellors, confidents and wealth mentors. Financial DNA reveals such a depth of behavior you can quickly assess how to advise and manage clients based on their very individual characteristics. (Based both on your own and their insights.)
  5. Getting to the core of the client’s decision-making biases. We all have behavioral biases; both you and the client. But we also now understand what those biases are and how best to keep them under control. Do you assume you can move from confident “face” meetings to remote advising – on Zoom, Skype, or otherwise? Do you think that because you’re skillful and successful in a meeting room that those intuitive skills translate via video conferencing? That kind of unchecked personal bias could seriously impact your business – and client portfolios.


Individuality versus success

We all respond differently to the same circumstances. So, if you want to keep your business open and successful and your clients happy and confident to know their money is in good hands, lay aside your individualism and pay attention to your clients’ personalities.

Know unequivocally how to adjust your behavior and personality to best communicate with clients – even when away from the familiarity of your office and beyond “face” meetings. Again, get to know yourself now before you assume you’ll be great online.

Here’s how to begin…

Select a client and get them on board so you can match both of your behaviors to understand the differences and how best to manage them. And use our Financial DNA Market Mood app to measure in real-time clients’ market fear or exuberance as the markets gyrate. This instant behavioral insight arms advisors with data to behaviorally manage clients during times of market turbulence.

So not only will you have a deep understanding of the clients (and your own) behavior, you will also have minute-by-minute access to a client’s reactions to current markets. Even with the most basic use of FDNA and Market Mood, you can use the information to pick up the phone and allay the fears of those clients who might panic.

How we can help

In the spirit of giving each other a hand up during these difficult times, try Financial DNA to reveal your financial personality on us, free. See below to get your free trial and/or book a 15-minute chat with one of my advisors right now to discuss how we can help you.

Stay safe. Stay home. And stay maximally engaged with your clients, even when your work with them can only take place remotely.