Behavioral Science

Behavioral Science Teams Increasingly Important to Financial Services

This article first appeared on Nasdaq.

Behavioral sciences teams can influence business strategy, decision-making and service offerings through deep insight into human behavior. Such a teams ability to understand behaviors helps mitigate failure and decrease industry waste.

The more innovative financial services companies are starting to appoint behavioral teams. They understand the power of applying behavioral science to improve customer and employee behavior.

Why add the behavioral facet?

Real-world financial decisions are complex. Investors look to advisors to inform their decisions. They want to make the most of their money to achieve goals and build for their future.

But how can each party build trust sufficient to share life goals? And the other provide corresponding advice that delivers those goals? How can customers be sure their finances are being managed within a culture of integrity, honesty and trustworthiness?

Never has there been a greater need for the financial services industry to prove it can be trusted.

What will be revealed…

Using behavioral science to identify and weed out misconduct is just one aspect, though it may be the most familiar. Being able to better understand people to inform the culture of the business is another side of behavioral science, and a fundamental aspect of building trust.

But the big one – and the one that will build and sustain business – is being able to use behavioral science to better understand customer behavior and to advise them how to make better decisions. Relying on big data itself is not enough. Big data is stronger when paired with little data, if you will; that is, behavioral insights and overlays that are sourced from personality discovery.

Interventions to foster better customer decisions have been around for a long time; behavioral science has opened our eyes to human differences and complexities.

Science, not soft

The application of this approach to the advisor-client relationship is new. The market now offers validated, scientific profiling systems that will identify not just decision making, but also how individuals react under pressure. This information is delivered to the advisor in real time at their fingertips.

Building a trusting and trusted culture based on financial behavior to help clients make better financial decisions is no longer a nice-to-have feature. Its becoming a competitive edge, if not a must-have.

Cost justified

Appointing a behavioral sciences team to work with leadership to shape culture and help advisors work more effectively with clients impacts the bottom line. Using the team in the hiring process and in the workplace sets the trust compass in the right direction.

Applying a behavioral data-gathering discovery places deep insight into the behavioral science teams hands. They can then respond to different demands across the business. From the behavior of the board to the frontline, they can advise and educate on how to understand and leverage (or attenuate) behaviors. Behavioral science teams look for and correct bias. Their work keeps the financial industry honest.

When financial advisors know how to use and apply behavioral insights, they develop stronger client rapport and can give tailored financial advice to clients. Ultimately, they can claim greater market share as they build a reputation of trust and integrity.

Think of that impact industry wide if behavioral science and discovery are applied to recruiting, assessing and managing people, truly tailoring advice, excluding any form of unconscious bias and making sure peoples inherent behaviors are accounted for.

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email, or visit DNA Behavior

Are Advisors Asking the Tough Questions

Are Advisors Asking the Tough Questions?


This article first appeared on Nasdaq.



Are you asking clients the hard questions about who they are and what their goals are? Or are you just selling them products based on potentially false assumptions?

Advisors must be willing to have bold-but-caring client conversations that focus on the client as a person without pushing for preconceived outcomes. Getting to know them and reaching below the surface to have real conversations not only accelerates trust, it also provides insight, so you can deliver more targeted and accurate advice.

  • Educators;
  • Sounding boards;
  • The go-to person when big financial decisions that impact the family need to be made; and
  • The protector of the clients wealth creation.

Likewise, it is critical for advisors “to know” their clients likely response to market shifts and be able to help them navigate challenging investment environments. Mis-managed emotions destroy wealth.

But, and its a big but, advisors themselves must be behaviorally smart and learn how best to communicate with clients. Everyone is unique; how they hear and interpret information, how they communicate and wish to be communicated with, how they make decisions, react to markets, behave under pressure – all this should be known to advisors.

The first step is to clarify in your mind that this approach is not only important in order to gather and retain clients, but that it satisfies the regulatory requirements of the knowing-the-client rules.

Understanding a clients financial personality from the very first point of connection, through every interaction over the lifetime of the client relationship, could be critical to the sustainability of your business.

A person’s financial personality is driven by their natural (hard-wired) behavior, which was programmed into them from birth to around the age of three. This is the predictable behavior that sits below the surface and will reveal itself when they are under pressure, which is often triggered by money and relationships.

By understanding the behavior first, the life perspectives and motivations of the client can be truly understood. It follows that you will then understand how the client makes financial decisions, which are inherently integrated with their life choices.

Having this insight in advance of working with a client raises an advisors consciousness to be able to pinpoint key issues. Further, it enables advisors to craft and ask powerful questions and, from there, guide the client through a deep discussion. Ultimately, the goal is to liberate the client, so they can find their life purpose and really articulate the goals they can be committed to.

Additionally, when advisors understand their own decision-making style; their own financial personality; their own bias (yes, we all have them) this insight, that can be shared with clients, creates a safer and more mutual environment that increases trust and open communication. Why not begin right now – try our complimentary DNA Behavior Natural Discovery here.

Still, most people are inclined to show their learned behavioral style at the first meeting (as opposed to showing their natural, inherent behavioral style). Its human nature; they are sizing you up before they share their true self. This learned behavior is consistently shaped by their environment, life experiences, values and education.

The use of the typical risk profile only provides a singular measurement of one aspect of the clients financial personality. They are usually highly situational in nature and not reliable in changing circumstances. The use of a robust financial personality discovery process reveals and measures all dimensions of who the client is, including their ability to manage risk at a deeper level, together with biases and communication styles.

Ask deep, probing questions – use behavioral insight to understand how to target these questions to each client. Clients and their families have deep-seated feelings about money. Its an emotional subject. Your job as an advisor is to cut through anything hidden – the issues, the hopes and expectations, the life plans – and direct a rational pathway for the client to achieve their financial goals.

What questions will you ask?

Corporate Culture, It Starts at the Top DNA Behavior

Corporate Culture, It Starts at the Top

Often in business, the way forward is not 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 connected to our work, at the intersection of data and behavior. But let’s look back a moment before looking forward.

Corporate Culture Five Years in the Making:

For the past five-plus years there has been a strong focus on corporate culture, including the installation of a Chief Corporate 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 corporate 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 aspects that affect and are affected by data or otherwise have to be part of the collaborative, comprehensive mix.

Chief of Corporate Culture:

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 exist. Leaders are beginning to see the next overlay many will need to connect all of these dots. That is a Behavioral Science Officer or behavioral science team’s role. 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.

At Business DNA we help firms large and small their Corporate Culture. Register to learn more.

Behaviors Role in Corporate Culture:

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 Chief of Corporate Culture or behavioral sciences team member in your organizations future?

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

Can You Spot The Client?

Can You Spot The Molotov Cocktail Client?

Historically, we have seen advisors selecting their ideal clients based on easily observed quantitative and qualitative factors. These often include (i) meeting a minimum of assets under management, (ii), shared values, (iii) preparedness to delegate, and (iv) being able to meet a specialist service need (estate planning, family business, business exit, etc.).

However, based on our work using Financial DNA over nearly 20 years, we have affirmed that there are deeper issues that need to be identified before taking on a new client – or retaining them once you see the pattern.

DNA Behavior International recently polled our advisor user base on their “worst client”. We got resounding feedback that most advisors worst client was “an engineer”. In my more than 30 years of serving clients, working with engineers was a challenge for me interpersonally because many of them constantly wanted to benchmark and finetune the portfolio. So, clients who are not relationally compatible with the advisor and therefore are hard to communicate with would not be suitable.

But in my experience, engineers aren’t the worst clients. The worst clients were hiding in plain sight during client onboarding but slowly required much more time and risk to manage throughout their financial journey because they are financially destructive.

In our 18 years of client discovery experience, we have found a trend of financially destructive clients. The most destructive clients tend to be the ones that require the most behavioral management and are not associated with a particular occupation. For instance, the couple that brings in $300k + per year and spends it all, the mother that cannot say “no” and the couple that constantly switches plans or presents with ideas for deals from dinner parties.

So, how can you identify these Molotov Cocktail Clients and avoid them? Look for these Molotov Cocktail Client traits:

  1. Have low Financial Behavior Compatibility because they are more prone to making destructive financial decisions that get in the way of wealth accumulation, and
  2. Are a low Relational Style because they are interpersonally harder to manage; thus, there is a greater chance trust will be lost and advisory risk will increase.

Discovering the Clients Financial Personality

The next evolution in discovering whether a client is ideal and how to behaviorally manage them is to get more insight into their decision-making and relationship behavior. Some clients will do a “behavioral flip” when who they naturally are at the core (Financial DNA Natural Behavior style) intensifies under pressure and in emotional situations – often caused by market and life events.

They go from seeming to be a congenial and desirable client to being too hot to handle. Is your firm prepared to manage clients who are not behaviorally ideal, even if they simply meet the four main criteria specified above?

We have adopted the belief that it is the client’s complete financial personality (their “Financial DNA”) which is a significant driver of wealth creation. Understanding a client’s risk profile is only one dimension that needs to be understood.

In particular, we believe that having a high ratio of spending to disposable income is the biggest destroyer of wealth. If a client spends all of their income then, unless there is a windfall event (bonus, inheritance, business sale), there is nothing left to invest. Also, of the clients who are spenders, many will invariably have high debt which puts their wealth creation further at risk.

Clearly, being a high risk taker can jeopardize wealth creation if poor decisions are made. Nevertheless, in order to create wealth, risks do need to be taken. So, in terms of a client’s Financial Behavior Capability, having a high risk tolerance is important. Clients also need to have a higher level of goal drive to build wealth. They need to be motivated to work harder and push themselves over a long period of time.

Financial Behavior Capability Research

DNA Behavior conducted a recent research study across 65,000 randomly selected participants who had completed the Financial DNA Discovery Process to determine which clients would be ideal from a behavioral management perspective. We identified the following statistics about a person’s Financial Behavior Capability when you combine the propensities for saving (or spending), goal drive and risk-taking:


Financial Behavior Capability Saving or Spending propensity Goals and/or Risk Population %
Very High High Saving And high goal motivation and high risk taking 11%
High High Saving And high goal motivation only 17%
High High Saving And high risk taking only 15%
Moderate Moderate Saving Moderate risk taking and goal motivation 14%
Low High Spending And low risk taking only 15%
Low High Spending And low goal motivation only 17%
Very Low High Spending And low goal motivation and low risk taking 11%


Relationship Style


Interestingly what we found is that only 3% of clients would be ideal from a behavioral management perspective when you combine a high Financial Behavior Capability and have a relationship style. All of the remaining 97% could be Molotov Cocktail clients who are prone to making financial decisions which would counteract accumulating wealth for meeting their goals and/or would be difficult (or not enjoyable) to inter-personally manage.


The behaviorally ideal clients (3% of the population) exhibit the following characteristics:


  1. High Financial Behavior Capability based on the 11% of the population having the propensity to: (i) save money (low spender), (ii) emotionally manage losses (high risk tolerance) and (iii) build wealth (high goal motivation).
  2. High Relational Style based on the 11% of the population with high financial capability as defined above, only 27% of that population (roughly 3% of total population) will have a desire to congenially work with the advisor to build a long-term relationship and not simply for performance management. Put another way, more than two thirds of the population with a high Financial Behavior Capability will be more relationally difficult to work with because of their strong results focus and demanding nature.

Will you be the advisor – or organization that employs many advisors – that takes on any client and advises them without any insight into their financial personality? Or will you leverage data to maximize advisor-client fit, tailor advice and client communication, and ensure retention, satisfaction and success on both sides of the advisory relationship?


Disruptive Innovation Challenges Business Consultants to Understand Behavior

Consultants are facing extraordinary changes in every industry, which is making it harder to identify and execute sustainable solutions. How do you best support, advise and mentor your clients when they are faced with unusual “competitors”, that is, the Disruptive Innovators?

Disruptive innovation is not new. Clayton M. Christensen first mentioned this theory in 1995. It’s only recently that industry has begun to recognize that finding new markets and new innovations to take to markets, might be worth pursuing to build their businesses.

So, what is Disruption Innovation?

Investopedia defines it as, “A technology whose application significantly affects the way a market or industry functions. a classic example (is) the internet.”

Interestingly, disruptive innovations come, not necessarily from the big end of town, but from entrepreneurs and even cottage industries. That is the mum at home or the guy in his garage.

This speed of change that likely threatens your clients can place business consultants at a disadvantage, leaving you unable to advise clients on how best to manage the impact of these disruptive innovators. Both you as the business consultant and your clients must be far more adaptable in your thinking – and the clients in their operational business structures – in order to make the quick pivots to deal with threatening changes.


The benefits of agility

Start-ups don’t have to worry about processes and procedures. They don’t have to “get everyone on board” to change. They don’t have to persuade their board or stakeholders. This gives them a huge advantage over established businesses.

They can take an idea and product to market using minimal input. They can market using social media. They can mockup their product and get friends to try it and provide the feedback to understand what customers might need. Who knew we’d be shopping online or having our coffee in “pop ups”? Who knew we’d be doing business of every kind online with our feet up and watching TV?

Many of us fear change and yet we are currently in the middle of a generation that welcomes, encourages and chases disruption.


Headache or opportunity?

This kind of pressure for push, push, activity puts established business on notice. They may want to find more innovative approaches to their business but are significantly restricted in what they can do – hence the potential headache for you as a consultant.

So, this begs the question – where do consultants fit in to this world of innovative disruption? Perhaps more importantly, how can a behavioral approach power innovative disruption?

Consultants who want to offer a much more effective service in this ever-changing world of disruption innovation need to approach their offering from a completely different place. First, consultants need to know human behavior is relevant at a very deep level. They need to understand the behavioural issues for all organizations.

When pitching for a contract in this climate of disruption innovation you must understand the biases and emotions that cloud judgment and impact decisions. You need to understand that the corporate world may well have the money to invest in innovation, but unlike the mum at home, or the man in his garage, they will see innovation as fraught with uncertainties. People like to know what is certain when they are making decisions.

Jeff Bezos, CEO of Amazon, says, “focusing on what won’t change has been the center of Amazon’s strategy.” He suggests that you should build a business strategy around the things you know are stable over time.


From Bezos to behavior

Well, natural DNA Behavioral insights, if measured using robust methodologies, will last forever as they do not change, and they pervade every aspect of how a business is run and the decisions made.

Much has been documented about cognitive biases and deviations from rational decision making. As a consultant the solution is clear: You must know the inherent behavior, decision making and biases of the executives you work with.

Seeing innovation from a behavioral perspective can lead to more effective decision-making outcomes. A behavioral approach to working with companies to help them become more comfortable with disruptive innovation will put you in a significant place to offer advice more in tune with the challenges the corporate world faces from corporate disruption.

Understanding behaviors will inform:

  • What’s getting in the way of the business being more innovative.
  • Who on the team will be more adaptable and able to pivot with fast changes caused by disruption?
  • Who on the team has the innovative thinking to identify what is happening next and come up with solutions?
  • Why leaders might be challenged and holding back those in the business who welcome disruptive innovation (in other words, are threatened by more innovative people and close them down).
  • How best to managing stakeholders and important “others” in the business when risky decisions have to be made.
  • How to see disruptive innovation as a new-world concept to be embraced without fear.

Consultants: Here’s where you start

  1. Get to know what forms of disruptive innovation your clients are facing in their industry.
  2. Take our complimentary DNA Behavior Natural Discovery using the link below. This will inform the degree to which you can uncover behaviors that embrace or resist disruptive innovation through your own personal lens. Said another way – how would you and your consultancy respond to a disruptive innovation that challenged your own business?
  3. Remember, when you purchase a Consultants Package from us, not only will it accelerate your offering with Behavioral insights that empower performance, you will be backed by a platform well on its way to managing in excess of a billion relationships.

DNA Behavior Natural Discovery

We’re here to help, call 1-866-791-8992, email, or visit our website to learn more about how we mentor/coach consultants worldwide.


Digital key in keyhole in information security concept

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.