Client Engagement

Are your couple clients at risk of leaving your Financial Advisory Firm-

Do You Have “At Risk” Clients?

Do you know which of your clients are at risk for:

  • Leaving your practice?
  • Becoming a compliance nightmare?
  • Sabotaging their financial plan?

You may have more than you think since customer experience is the internal andsubjective response your clients have to any direct or indirect contact with your firm.

The two key words that should have you concerned are internal and subjective because you cant measure or control these aspects of your client.

According to the 2014 EY Global Insurance Survey, 89% of clients want more frequent, meaningful and personalized communications from their advisor. And in fact, 35% of clients leave to find an advisor who is better at communicating.

In order to retain your clients, you need to have an objective process to uncover a clients financial personality. As intuitive as an advisor might be, they can no longer afford to rely on subjective observations and open-ended questions. Using technology-based tools will soon be the new normal in the industry.

The combination of your baby boomer clients nearing retirement and the market volatility can easily lead to some unforeseen compliance nightmares. Why? Because emotions are heightened and clients who appeared risk tolerant and told you they were risk tolerant can suddenly change their mind. They were fine as long as the market was going up (or even down a bit) and retirement was years away. Now as they start to create their cash flows and realize they are in the withdrawal stage of life, market performance can make or break their golden years.

In addition, the stress and considerable psychological changes that your clients are going through as they near retirement may cause them to unknowingly sabotage your carefully created financial plan. You may have more difficult conversations with couples as the husband might have visions of expensive vacations while the wife is content on cutting back expenses.

What if you had this behavioral information at your fingertips from the very start of your relationship? Imagine a world where, in times of market volatility, you could pull up a list of all your clients, see their level of trust and have the customized communication step you should take at that moment. Youd find client retention increases, your compliance challenges stopped before they are given a chance to start and clients that commit to sticking to their financial plan.

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Is Your Client a Stormtrooper, a Wookie, Or an Ewok?

For Financial Advisors on the Dark Side, there is one truth…All Storm Troopers are alike. They all wear white plastic helmets and are lousy shots. However, I am guessing you are a Financial Advisor for the Rebellion. The unfortunate side of working with the Greater Good of the Force is no Wookie, Human or Jaba the Hut are alike. Yoda would tell us “handle the same, all clients I would not”. And, as we learned in the latest episode (no spoilers), even those Storm Troopers can get out of line.

How can you communicate with all of these species with different needs and outlooks on their investing? It is amazing in the movie to see that every race communicates in English, or at least understands it. That DOES NOT happen in real life.

Since the galaxy isn’t a perfect place, not all Rakatas are the same and we do not get to choose just one species to work with; how you connect with a Chiss, as opposed to a Sith, is not an easy task. This is where DNA Behavior becomes invaluable to you. Every Gran & Gungan needs a good retirement plan; especially if you were NOT asked back to be in the next installment. (Yes, we are looking at you Jar Jar Binks.) The ultimate question is, do I need a CP30 unit to communicate with these people? The answer is NO. Just have them take a 12-question Communication DNA Discovery. Easy for you, easy for them.

Matrix

When talking with new Rebel Advisors, I get more questions and apprehension on what this crazy looking matrix is and what it means. How does this matrix help me? Quite simply, this image is one of the easiest keys to read and understand who will be matched up most easily. If a new Jawa (columns) is a Community Builder, but their advisor (rows) is an Initiator, will they be a good fit for each other? With one easy look at this matrix, (no lightsaber or X-wing needed) you can see that they will not have an easy time connecting. But, if there is another advisor in that office who is an Engager & fluent in Javanese, they will likely have an easier time matching their natural behaviors to each other. We know this matrix does not create a bromance like Chewy & Han Solo. It just helps you to understand where your client wants to retire: a swamp on Dagobah with Yoda or a beautiful forest with the Ewoks on Endor.

For more information, please visit https://financialdna.com/reports/ to find out how DNA Behaviors reports can help your teams client engagement strategies.

Know Your Client and let them share in the experience

Know Your Client and Let Them Share in the Experience

The question we are most often asked is will my client want to participate in the Financial DNA Discovery Process? Our Wealth Advisors have had very few clients resist participating. The reality is people do enjoy learning about themselves. It can even help in their business and personal lives. It is liberating for them to know what their strengths are and struggles are from a validated process. The key point is that the client feels understood. Further, people love to talk about themselves. After all, that is their number one topic.

So, why not guide the discovery process and let them talk about themselves. If there is a barrier in an advisors mind about their client participating, it is usually just in their own mind.

The important point in getting the client to participate in the Financial DNA Discovery Process is to ensure it is introduced as a normal part of your service. Taking that further, connect it to your desire to provide them with a customized life-long service experience, set their goals and help them not make emotional decisions in reaction to events and markets.

If a client refuses to take the discovery; does that tell you something about the prospect or client? Having full transparency can enable your firm to grow and prosper. If you have a client that isnt willing to participate that says a lot about their behavior. If they trust you with their money, dont they trust you to know them better? You dont want to increase the risk in your firm, by not having transparency with your clients.

The process can start with Communication DNA Discovery; which only takes 2 -5 minutes and the rest of the steps can be progressively introduced over time.

We have many success stories using the discovery process. Click on this link to read about a recent successful client story.

If you are feeling any resistance yourself, then there is no harm in completing the process to find out and experience for yourself the power of the experience. You will feel liberated and want to ask questions!!

Learn more about Financial DNA Discovery or to start a trial click here.

 

Financial Advice is Becoming a Commodity

Financial Advice is Becoming a Commodity: Get on Board or Get Left Behind

It’s inevitable. Social media is taking over marketing. Further, the “robots” are also storm trooping the industry in how financial advice is provided and how investments are managed.

The reality is that many parts of the financial advice process and investment management are becoming a commodity. As a consequence, many in the financial advisory business could suffer as a consequence of this move away from the traditional view of financial advice.

However, you can take advantage of this shift to increase your practice. The key to success is to differentiate your service model from other financial advisors and the increasing array of online resources and systems. The number one strategy for financial advisors is right under your nose at the initial step of the financial advice process. That is to have a much deeper understanding of your client’s needs and related behavioral finance biases, and to directly involve the client in the discovery process to increase engagement. Inadequate 5 to 20 question assessments that address only risk’ won’t cut it anymore. Neither will guess who the client is. Clients should be given the opportunity to participate in the completion of a comprehensive process which then enables the advisor to comprehensively know their client and their life journey.

As the new landscape for advisors evolves, you don’t have to bemoan it. If you adapt, you can seize this as an opportunity to actually grow your business. Look at the areas of the advisory process that can and should be commoditized. Leverage these technical platforms so that you and your team spend less time on investment management. Educate them, not only on the technology and investments, but more importantly, on how their approach to finances, investments and money can move clients towards achieving their life goals. The key starting point is to holistically identify the client’s financial personality. Then use those insights to help clients manage their behavioral biases to prevent setbacks or missed opportunities and further grow their nest egg to achieve their goals.

It’s time for financial advisors to recognize that clients don’t have to be lost to the new world order of do-it-yourself’ financial planning. Those financial advisors who have long ago invested in building relationships based on knowing their clients, knowing the plans they have for their lives, knowing and being a part of strategizing their financial roadmap to achieve their goals will not lose clients and actually grow their business.

Here are 7 practical tips:

  1. Use an independently developed and robust questionnaire based discovery process with clients at the point of entry and at annual reviews with existing clients. This will give you a clear insight into what they want to do with their finances.
  2. Focus on goals-based life planning and the financial plan to achieve those goals.
  3. Take the mystery out of investing. Proactively build areas in your advisory process where clients can manage their investments for themselves. This will keep them connected with you as their ‘go-to guy.’ Be a source of knowledge for the client.
  4. Build trust. Get to know how much clients understand markets and then educate them around the gaps (this builds trust.) Knowing their communication style and how they want to work with you will build trust quicker.
  5. Focus on the relationship being a two-way partnership.
  6. Match advisor to a client based upon their financial personality and communication style. This is a key differentiator for success.
  7. Help clients to understand their behavior during market movements. Understanding behavioral finance should be bedside reading for every financial advisor.

Time to develop your value position as a financial advisor. Don’t get left behind in the commoditization of the traditional financial advice process. Embrace the exciting Behavioral Finance future.

Try Communication DNA or Financial DNA to see how you can become the Financial Advisor of the future.

President Obama

Behavioral Insight to Be Used to Serve the American People – Presidential Executive Order

It’s not every day the President of the United States makes a stand on using behavioral insight to improve service delivery.

The executive order targets Federal departments, but could just as easily read across to every service provider…The Executive Order formally establishes (Social and Behavioral Sciences Team) SBST and directs Federal agencies to integrate behavioral insights into their policies and programs

If as suggested, understanding behaviors enable providers to deliver more effective services to the American people, how then will financial advisors introduce this approach with their clients? It’s where people are probably at their most vulnerable when discussing their finances. It’s where people are liable to make ill-thought through decisions under pressure. It’s where people are likely to revert to inherent behavior and bias.

Francesca Gino, a professor at Harvard Business School (which is a faculty affiliate of the Behavioral Insights Group at Harvard Kennedy School), writing in the Harvard Business Review says of the Presidential Executive Order..

This order reflects the evidence that scholars across a variety of fields – from behavioral economics to psychology to behavioral decision research – have accumulated in recent years that people often fail to make rational choices. Across a wide range of contexts, we often make foolish decisions that go against our self-interest.

It’s a fair comment – people fail to make rational decisions in many areas of their life. Much work has been undertaken in terms of how people react and make financial decisions when under pressure. If financial advisors are to play their part in delivering this Presidential Executive Order, then understanding the core hardwired behavior of clients is foundational.

Clearly, since the Whitehouse announced the use of behavioral insight in delivering services, helping people make a better life and financial decisions are no longer just going to come from smart strategies, new innovative products, improving technology and better information. Rather, it will be driven by understanding the behavior of those people and how they make decisions. In the financial planning context, closing the gap between a clients’ true financial behavior and the rationality required to make sound investment decisions requires a deep understanding of their financial personality. Therefore, gaining objectively measurable, reliable and predictive behavioral insights about how a client will make financial decisions before providing a product or solution is critical. Further, applying those insights in a Behavioral Investment Policy Statement will provide advisors with a customized framework to guide their clients in making decisions and minimize the impact of emotions.

The Presidents Executive Order has wide-reaching impacts for service delivery in every area of business. It has brought to the forefront of American business the need to understand behaviors and how their customers/clients make decisions. Research in this area of behavioral science has been around for a very long time. But now is the time to put the research into action in every field of business, government, and life.

 

Image source: www.theblaze.com

How Team Matching Increases Client Engagement

How Team Matching Increases Client Engagement

For financial advisors, there is the unfortunate truth that nobody has created any identical clients, yet. If only there was a way to get the same client in your business, so you could handle all of your clients the exact same way. It’s also very difficult to find and hire the exact same type of person as additional advisors in an office to handle those same client personalities that aren’t there.

Since the world isn’t a perfect place and we rarely get to have any input on who comes in or out of our lives, we can at least now understand how to connect with those different clients who can be so wildly different. Further, we can better understand how to put different advisors within an advisory office in a position to match up with clients so they are a more natural fit and exponentially better client engagement.

When talking with new clients, I get more questions and apprehension on what this crazy looking matrix is and what it means. Quite simply, this image is the one of the easiest keys to read and understand who will be matched up most easily. If a new client (columns) is a Community Builder, but their advisor (rows) is an Initiator, will they be a good fit for each other? With one easy look at this matrix, you can see that they will not have an easy time connecting. But, if there is another advisor in that office who is an Engager, they will likely have an easier time matching their natural behaviors to each other.

For another illustration, please view the Behavioral Management Guide at the Financial DNA Sample Reports to find out how DNA Behaviors reports can help your teams client engagement strategies.