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Financial Advisors See Data as a Differentiator

This article first appeared on Nasdaq.

With financial advisors under considerable pressure to strengthen their competitive position through an improved understanding of their clients, adding a behavioral insight tool to the client onboarding process can help advisors obtain new insights about a client’s behavior and financial personality.

In doing so, it is imperative for firms to interrogate this data that is relevant to each client. The way to use data as a differentiator is to know clients at a deeper level. Their decision-making style, spending patterns, goal-setting motivations, approach to and tolerance of risk, behavioral biases, and responses under pressure, as well as knowing each client’s likes and dislikes and life journey.

Measuring and discussing financial behavior is the first step for advisors to get to know their clients. And we already know that, for advisors to provide valuable advice, it is key that they understand clients and client goals.

Gone are the days of form filling. Advisors need in-depth, accurate information at their fingertips. Clients already understand that life requires them to be subjected to an array of technology experiences. They get it.

What many clients do not accept is poor service. For instance, feeling that they are not front and center of the relationship. Feeling they are a statistic. Feeling like the financial advice they are getting or the way they are getting it is generic or ill-matched to them.

When advisors start to deploy technology which delivers a great experience for their clients, then and only then will they gain a competitive edge and restore broken trust.

The use of application programming interfaces (APIs) is presenting a new and exciting range of possibilities to financial advisors. Essentially, APIs act as a sort of plug in, bringing a specific functionality to other, already up and running systems, so an advisor, group of advisors or small or large organization can add bells and whistles to a system without having to invent/reinvent their own.

Such an API can permit the flow of information between applications and give financial advisors the ability to, in this circumstance, easily access on a real-time basis client data, gain insights and offer innovative solutions tailored to the clients’ life plans while complying with regulatory requirements

Through the magic of APIs, “behavior tech” platforms can now be white-labeled and inserted inside organizations so that they can access scalable and easy-to-use online behavioral management solutions to know, engage and grow every client (and their advisor!).

APIs like this are not tomorrow’s solutions. They exist now, waiting only to be embraced and leveraged. This is the power – here and now – to use behavioral insights to create truly unique and robust experiences for advisors and clients. It engages clients in a way that demonstrates the degree to which advisors will go to enhance the financial planning experience – and the success they can have with and for a client.

Every financial advisor should be able to use interactive business intelligence tools to drill down into client information. In advance of every meeting or phone call the advisor should, at the click of a button, be able to deploy dashboards and personalized information to respond to client needs. This approach can and will create an experience tailored to individual clients’ needs.

Clients and advisors alike want “easy” and they’ve got it if the right API or behavior tech solution is deployed. Everything is right there on their mobile devices.

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Is Enculturating Behavioral Sciences Next?

Often in business the way forward isn’t “or” but “and”. That is, not abandoning one cornerstone for another; rather, adding other building blocks as necessary. It’s the cumulative approach that can streamline savvy organizations who are able to move beyond the fear of adding additional elements or layers.

We’ve been seeing this trend in a way that is particularly germane to our work, at the nexus of data and behavior. But let’s look back a moment before looking forward.

For the past five-plus years there has been a strong focus on corporate culture, including the installation of a chief culture officer or some other executive-level champion of thoughtful, strategic culture initiatives. To a great degree they focused on goals, alignment and communication, with tentacles reaching into every corner of an organization. That is great and we should not throw out our emphasis on the power of a curated culture.

Still, the last few years also have seen the amount of data organizations wield grow exponentially. That too is good and exciting, but only if they can fully leverage that data while at the same time deftly coordinating all the many facets that affect and are affected by data or otherwise have to be part of the collaborative, comprehensive mix.

So, let’s get back to that trend I hinted at above. At the intersection of culture, people, customer experience, big data, AI, machine learning and all of the other elements a robust organization must coordinate, leaders are beginning to see the next overlay many will need to pull across all else (as they did when making culture a studied part of their infrastructure).

That is a Behavioral Science Officer or behavioral science team. We know people approach and understand things differently and communicate in myriad ways. That’s what is driving these leaders to envision some sort of coordinated effort that leverages behavioral data across disparate areas of their business.

This might address anything from testing out new products, experimenting with words and customer retention to hiring, governance, regulation and accountability. In short, not only harvesting people data, but also ensuring it is valid and relevant and maximally redeployed to greatest effect.

A devil’s advocate might say of course this sounds like a good idea to someone who offers a validated behavioral discovery tech platform. But truth is, the need for a top-down, across-all embrace of behavioral science is bigger than just that tech platform, which could be one very effective part of such a rollout, but, still, only one part of it.

The amount of data, including all sorts of behavioral data (whether harvested or not), generated and held by organizations will continue to grow. So will the need to improve everything from products to profits and accountability by leveraging the massive amounts of information. By managing behavior.

I would venture to say that even the early adopters of a behavior tech platform like ours would realize the most success by taking a big-picture, infrastructure approach to behavior sciences. Ultimately, the key is to activate all of the insight data you have (access to) so you can know, engage and grow employees and clients, anticipating what they want and need – and delivering it – maybe even before they know what they want.

All business is about people, and because business is a people science, we must understand human nature to truly excel at and understand business. Human nature is stable and needs to be understood; doing so can and will affect your bottom line. Using a behavioral science approach will identify the business goals and challenges that can be reached and resolved through the scalable and practical application of what I like to refer to as understanding people before numbers.

What areas of your organization would benefit from the layering in of behavioral science? And can you foresee a C-level behavioral sciences team member in your organization’s future?

I’m interested in your take on this, so talk back: HMassie@dnabehavior.com. I’ll of course be watching this trend and any others that touch behavior, money and tech. I promise to report back.

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Why Senior Executives Leave in Droves?

How does the Behavior that took them to greatness become the Behavior that wrecks their success?

Bad news, it’s always been there but has either been managed, or sat below surface.

A recent major fail was that of Elon Musk, CEO of Tesla, publicly smoking pot while being interviewed. It begs the question, What kind of a brain snap caused him to do this? At the very least his judgment would come under scrutiny from investors and board members, but more worryingly for Tesla, Musk had already attracted the attention of SEC.

The U.S. Securities and Exchange Commission is intensifying its scrutiny of Tesla’s public statements in the wake of Elon Musk’s provocative tweet Tuesday (8/7/18) about taking the electric-car company private, according to two people familiar with the matter. http://fortune.com/2018/08/09/sec-investigating-tesla-elon-musk/

Every mis-step (to be polite) begins at the top. Musk may be why the business has become successful, but there is clearly a dark side, and that may prove to be the cause of the company’s failure. It’s not a new phenomenon for a successful person to go rogue. But this behavior can be uncovered. And where there is a level of accountability and self-examination into personality that lies below the surface, such potential meltdowns can be identified and managed.

In the case of Musk, the chances are that this unprincipled behavior that always sat below the surface has now been revealed because of changes to environment, stress, fear, burnout or endless other reasons.

The kind of meltdowns covered in the media, though they surface from inherent behavior, have probably been managed until now. In most cases, the work-life balance has shifted sufficiently to surface this craziness.

Many entrepreneurs, CEOs and senior leaders do a great job. They lay strong foundations both in their business and in their life. They make themselves accountable to others so that unhealthy or outlandish behaviors can be challenged.

The truly behaviorally smart ones invest in a scientifically based data gathering process to understand the hot spots in their personality. They get a good read on what or who can surface inappropriate responses in them and learn coping mechanisms so they can be managed.

One of the recorded fall outs from Musks peculiar behavior, is that talent will leave the company in droves, not wishing to be associated with weird behavior. This outcome is very often the red flag to the board, investors, customers, and would-be hires, that this company is heading for a train wreck.

Worryingly, this behavior is not isolated to industry leaders as many nations are finding the behavior of their political leadership.

In his book,Behaviorally Smart Entrepreneurship: Mastering Your Entrepreneurial Genetics, our founder, Hugh Massie, CEO and Founder of DNA Behavior International, records the following:

As the business grows, entrepreneurs tend to feel besieged by the day-to-day workload. The appointment of an Integrator (or Master Key Executive) who has the experience, skills, and temperament to manage the day to day business operations and understand how the entrepreneur ticks will ensure the business has a strong foundation. More importantly, this role lifts the daily pressure from the entrepreneur, leaving them free to focus on their strengths.

Entrepreneur eBook

A Master Key Executive or COO whose personality works with the CEO, yet has the strengths and behaviors to not only compliment them but challenge them, could be the missing link that caused these senior leaders to go rogue.

The phrase get to know yourself, before you wreck yourself may feel like something out of the urban dictionary, but as a leader of a multimillion-dollar business, Musk and others should have done themselves a favor by knowing and acting on this phrase.

Maybe the thought of using a scientifically based psychometric testing process is a controversial topic, but such an investment into self-knowledge reveals, not just strengths, but also specifically what’s below the surface, that needs to the surfaced, understood and managed. No one is above learning more about themselves.

This investment into self provokes people to think more deeply about their entrepreneurial and leadership genes and the essential success factors. If you have no real insight into your personality, it’s time to learn more.

The key to getting started is the completion of the Business DNA Natural Behavior Discovery Process, which takes 10 to 12 minutes online. The outcome provides insights into your leadership and entrepreneurial genes. Armed with this heightened self-awareness, we deliver a structured approach on how you can take the first step towards your entrepreneurial goal. Why not begin right now – try our complimentary DNA Behavior Natural Discovery here.

If you have completed this process you can contact us on (Australia) +61 2 80742995 x706 or?1-866-791-8992 (United States) for one of our highly-qualified consultants to work through the report with you.

Do it today to avoid the chances of becoming a headline.

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email inquiries@dnabehavior.com, or visit DNA Behavior

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How to Become a Behaviorally Smart Advisor

The financial services industry needs new business models ones that help re-define what a financial advisor is capable of beyond just a numbers oriented investment orientation. The traditional twenty-five year + model of providing investment access and selection is being disrupted by technology and new players coming from other industries. The friction from this evolving operating environment seems to be leading to exploring more holistic and new client-focused experiences that create more engagement and deeper connections.

The Institute for Innovation Development, to explore this further, recently talked with Leon Morales, Managing Director of DNA Behavior International a behavioral finance technology platform designed for financial advisors to Know, Engage and Grow their relationships with their clients and prospects. We discussed the evolving nature and changing value proposition of financial advisors into this more holistic model with advisors serving as client behavioral coaches and mentors.

Hortz: You have frequently quoted from the Spring 2000 Journal of Investing article that states 93.6% of the financial planning process is the behavioral management of clients. We have always understood that being an advisor is, bottom-line, a relationship business but, what does that number tell us about the true nature of the financial advisor role

Morales: All the studies and resulting data that have looked at the issue appear to agree, that client behavioral management is one of, if not the, most important function of financial advisors. Understanding the clients communication style, personality, emotions and fears, these need to be mastered and managed by the advisor. Learning practical ways to understand the individuality of clients, how they make decisions and what triggers their emotions, are key to being able to guide the client over the longer term successfully, coaching them to truly achieve financial goals. What this points to is the ultimate importance of advisors being behavioral managers as much as they are technical managers of investments.

Hortz:What do you recommend as the key steps advisors must take to start strengthening their behavioral IQ and behavioral management skills with clients?

Morales: The most important step required for moving from the traditional financial advisor role to that of a Wealth Mentor is to learn first how to ask much better questions of the client. This enhanced discussion builds greater client relationships and opens the dialogue to reveal core behaviors, biases, reactions under pressure and other issues. Part of our Certified Wealth Mentor program’s takeaways is a list of many key conversation opener questions, used for client meetings. Further, the questions will encourage the clients to probe their own thinking. The advisor then gains insight into how the client makes decisions, the client’s reaction to taking a new direction, or confirmation they are on the right path.

Together with insights from our behavioral reports, this enables the advisor to identify points of alignment between what’s stated in the report, versus what clients are saying. This comparison enables the advisor to zero in on the clients areas of strengths and struggles and narrows down the tension between processes and behaviors that might get in the way of delivering outcomes. This kind of client connection, using our very concrete system, builds long term advisor/client relationships and advisors will know how to manage client bias and reaction under pressure.

Hortz: What are some predictable insights you can discover about your clients

Morales: Our DNA Discovery process delivers insights in several key areas:

  • Communication- -enables advisors to connect and work with the client on their terms
  • Biases - – awareness of assumptions or mental habits that need managing
  • Spending patterns -uncovers money habits that may impact investment strategies and outcomes
  • Risk tolerance and reaction to market movement- provides detailed behavioral insight into the client’s natural risk tolerance and risk propensity

Hortz: Can you walk us through your claim that a behavioral approach, using your wealth management platform, results in 99.5% client solution suitability and additional client value

Morales: The use of the Financial DNA behavioral approach enables the advisor to more deeply engage with their clients. Asking the right questions, and having a robust discovery process that more rigorously breaks down all the elements that make up risk, to a much tighter client discussion, reveals how much risk really needs to be taken, how much risk could financially be taken, and blending learned behavior and natural behavior to cover the right level of risk. Behaviorally smart advisors -who manage these conversations with the client well – will get a much higher level of suitability in what they recommend and what gets deployed or purchased in the end.

Dalbar research shows that 7.45% a year is the potential loss because of investors not having an advisor and making poor decisions. There is safety for clients in having a behaviorally smart wealth mentor manage their portfolio, rather than trading their own accounts. This goes back to the risk profiling where we believe we can get to 99.5% clients solution suitability. Therefore, 91% reflects accuracy from the DNA Natural Behavior Discovery and the other 8.5% comes from the learned behavior discovery.

Hortz: Do you see an evolution in what a financial advisor’s core job is and how they will be perceived in the future?

Morales: Yes. I believe that the advisor needs to become a guide for life for the client and to be able to navigate all the issues clients might face. When the client sees the advisor as their go to person for help with decisions, a trusted collaborator, that not only impacts their financial and investment world, but also life decisions and choices, all of which are foundational and have financial consequences. This kind of advisor-client relationship opens wider conversations regarding family dynamics. Advisors need to be the family advisor, and that’s going to be a big area for them in the future. To do that, they need to broaden their skills to handle a wider range of areas, or at least be able to communicate about them.

Importantly, a core adjustment required is the change from client meetings to client conversations. The word conversation makes the advisor/client engagement process easier, less formal, more likely to deliver open discussions. This adjustment is the process we have been bringing in to some of the firms we have worked with recently.

Hortz: How do you help advisors change their habits and ways of doing business to help them evolve into this new advisor business model

Morales: While education and our Certified Wealth Mentor Program are an important part of the process, a key strategy for DNA Behavior International, in order to help advisors make this happen, is to embrace our role as a behavioral Fintech company. We can now take our behavioral tools, processes and knowledge and embed that into their practices through an easy, accessible, online behavioral platform which provides them with practical and scalable behavioral intelligence across every client and firm employee. They would have readily available behavioral awareness, using our built-in discovery processes, and real-time behavioral management capabilities using our apps. Behavioral management can now be infused into the DNA of the firm.

Hortz: Tell us a little about your steadily growing list of strategic partners (BrilliantFIT, AMP) and how you work with them in extending your behavioral platform and resources to equally support advisors, clients, and other key financial services vendor firms

Morales: We have a wide range of technology integration able to be deployed, not just in the financial services arena, but across many disciplines and industries. With Financial DNA, we are a leader in the deployment of personality and behavioral based tools, but we also have such relationships as our hiring partner Brilliant Fit, based in Melbourne, Australia. They are making inroads by integrating behavioral discovery to the filtering of candidates for management roles and ongoing career development.

We built an alignment with Salesforce, so DNA insights are on the Salesforce platform. We are also currently working with firms on matching advisors to clients based on personality styles. We work with big data to open a significant access to leads by building algorithms to be able to link that data to personalities. We are working with a range of financial planning software groups globally using our behavioral chip strategy to power the behavioral management of the client experience.

Hortz: From your perspective in building to and working with a wide cross-section of financial advisors, what is your best advice for advisors in how to navigate this changing business environment in which they are now operating?

Morales: From my perspective, the first key point would be for advisors to develop their emotional intelligence (EQ). Personal development will make them more effective advisors as they interact with a wider range of clients. Maturing professionally in this way will make them a better advisor in guiding others through life challenges again, an expansion of their roles beyond financial guidance. This approach is what will lead to sustainability of the relationship.

Also vitally important are building more processes inside their businesses, particularly around technology, to enable a customized experience to be delivered. Introducing good technology releases advisors to build business and identify gaps where they need to hire and develop good teams.

A further key area is looking at existing revenue models. The current approach needs to be reviewed considering the changing role of advisors with the ability of advisors to become behavioral coaches to their clients. Knowing the importance of behavioral management, advisors can use these behavioral insights to look at how they make their money.

Delivering goals-based financial planning means advisors need to look at how they bring in a retainer fee for working with the clients on an ongoing basis. The new revenue model needs to reflect: running the annual meetings, helping the clients work out their goals, navigating difficult decision-making situations and transitions. Price points can be reviewed, as they add value through mentoring- coaching clients on how to manage their behaviors towards their goals.

Ill leave advisors with one of the favorite quotes of our founder, Hugh Massie: Strict rationality kills culture and relationships, and unmanaged emotions destroy wealth. Financial advisors will be well served to be able to deeply engage and reconcile client thinking and behavior with that clients life and wealth goals.

Written by Bill Hortz, Founder & Dean, Institute for Innovation Development

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors – Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). For more information click here .

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Short-Circuit Client Self-Sabotage And Empower The Advisor

This article first appeared on Nasdaq.

Last time in this space we discussed how the industry is more client-driven than ever. That’s not necessarily a bad thing, unless an advisor encounters a client who will not listen to advice and is self-sabotaging.

There are techniques we discussed to help identify and challenge such clients. We agreed that having client behavioral insights ahead of client meetings (and before red flags occur) is an opportunity to tailor your services to each clients uniqueness. So, while imaging a scientifically based data gathering tool as part of an advisors arsenal, lets take this conversation to the next step.

Self-sabotaging approaches are identified and successfully managed when advisors know that:

  • Every client is unique; and each has different wants and needs that must be known and managed.
  • Every client will have cognitive biases, emotions, fears, anxieties, greed and excitement, at varying levels and combinations.
  • Clients and their families lives are complex and each will have their own thoughts on life planning.
  • Clients are better informed and educated than ever before and may wish to take greater control of their finances, for better or worse.
  • Market volatility, lack of trust, and fear have become real issues for many investors; these facets will dominate many client-advisor conversations and the subsequent decisions.

In turn, this same level of insight and behavioral knowledge empowers the advisors to:

  • More effectively understand client behavior and emotional decision making.
  • Understand how to move the client from a need to control to one of mutual relationship.
  • Manage client fear, based on historical market movements, and build confidence in future markets.
  • Uncover and understand a clients life goals (even those they may not have known or acknowledged themselves).
  • Apply a deeper understanding of client behavior to your work on their behalf.

One of the main reasons clients hire financial professionals is to gain objective, expert, personalized advice. When they approach you as though they were the expert, care needs to be taken to avoid role reversal. Only when advisors are armed with insight into their clients behavior and decision-making style can this approach be managed.

Ultimately, advisors who implement solutions that deliver insights to client behavior can help better manage know-it-all or self-sabotaging behavior. But remember that know-it-all advisors also exist too.

Clients are smarter than you think. You wont get their business if you dont understand your own approach. That is why a healthy and professional client/advisor relationship is built on the premise of knowing me, knowing you (cue the ABBA song of the same name).

With an eye toward the fact that you will eventually do the same for all of your own clients, get to know your own inherent behavior and bias. Not only will this self-awareness enable you to work with difficult clients, it will deliver significant insight in to how best to manage your own behavior + theirs.

Why not begin right now – try our complimentary DNA Behavior Natural Discovery here.

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Are You a Behaviorally Smart Consultant?

Some of the greatest and most successful businesses started in a garage, on a kitchen table, or the idea was first written in a childlike dream journal.

Many of us broke away from safe salaried positions to step out on our own. Not having the desire to chase the corporate or entrepreneurial dream, but all with a passion in our heart and all wanting to be an independent consultant in our chosen field.

But for every consultancy there is a time when you face a cross road. Maybe the consultancy has plateaued and you just can’t get it to the next level without more framework, processes and, importantly, insights. Most consultants know that place and sometimes the solution to re-start the motor comes from the most unexpected places.

It could be a chance meeting; a never before identified hole in the market that you can fill; a restructuring of your target audience or a chance reading of an article like this.

We at DNA Behavior International are looking for YOU.

Not your clients, not your expertise (well, that would be interesting to hear about). We are looking for consultants who know they need another valuable tool in their kit to be able to offer a higher level of expertise to their clients, deploying behavioral insights inside organizations.

Some 20 years ago a conversation took place in which a couple of minds shared their frustration with how they were being served in the financial services industry and we thought, if they had known how to communicate with us, if they had known how to understand who we are and what we were trying to achieve in life they would have kept us as clients. Needless to say, they didn’t.

But the conversation turned to a broader range of topics. Why, we asked each other, do service providers neither know or care who we the client (or customer) is?

We then moved our conversation into our own areas of expertise and what we could do to save the world, or at least, failing businesses. This is what we talked about:

  • How can a service provider get to know what makes their client tick?
  • If they could, would that mean they could offer a more effective service?
  • Would they need enhanced skills in building interpersonal relationships?
  • Would understanding a persons inherent behavior change the way businesses operate?

For example:

  • How people were hired
  • Who was hired
  • Who is the ideal client
  • Building a healthy corporate culture
  • Team spirit
  • Leadership – what approach works, what doesn’t work and how willing would they be to put People before Numbers
  • Would communication be different
  • Might there be fewer conflicts in need of resolution
  • Would individuals have a greater sense of responsibility and passion to delivering the vision of the business
  • And would getting the behaviors right and understood radically impact how clients are treated and how much more likely they are to stay with you)
  • Could the bottom line of a business consultants work be improved if they knew how to impact the behaviors of the clients they work with?

So, here’s what was birthed some 20 years ago out of that conversation.

DNA Behavior International is a behavioral sciences business which uses validated behavioral insights to enable organizations to deliver customized employee and client experiences. In particular, it helps people and businesses with effective communication, operating in their strengths, managing emotions and making smart decisions that helps individuals and organizations discover and leverage strengths.

And this is why we are looking for YOU.

We want to find consultancies who want to partner with us to build their practices/businesses.

We are not focusing on consultants in any specific industry; we’ve found that every kind of industry always has an element of people and behaviors where there is a need to know, engage and grow every client and their employees and clients, to build a behaviorally smart business, that in turn grows your consultancy.

What we are looking for are consultants who want to grow their business using scientifically validated behavioral intelligence solutions.

This is a call to arms for all such business owners who are currently engaged in delivering services to organizations.

Whether you provide coaching, mentoring, training, 0r HR functions, and from the C-suite to the shop floor, DNA Behavior International is looking for you

Partner with us, and our behavioral intelligence solutions will unlock business value for you and your clients and give you a significant competitive edge.

We at DNA Behavior International will be the point of difference that sets you apart from other business consultants.

This solution is already in use worldwide in major industries; we have decided to widen our relationship to include your consultancy.

DNA Behavior International is an international authority in the field of scientifically based insight into Natural Behavior Discovery. It is the world’s only all-in-one behavioral intelligence business platform for reliably discovering all dimensions of personality.

  • Its use can solve 87%of business issues.
  • It can improve employee productivity by up to 40%.
  • It increases team productivity by up to 70%.
  • It increases revenues by 23% per year

So, if you want to know more and receive a complimentary discovery process then link with me and/or message me. carol.pocklington@dnabehavior.com