Financial Personality

Financial Advisors + ID + EI – What Does It All Mean?

It’s an age-old question. How can financial advisors break through emotional barriers to help clients with their finances?

In recent Identity conversations with Canon Financial Institutes Executive Director Certifications, William Trigleth III, Hugh Massie,  Chairman and Founder of DNA Behavior Global, talked about the importance of financial advisers understanding Emotional Intelligence (EI) and Identity (ID) as a starting point to knowing how to manage advisor/client behavioral differences.

Trigleth acknowledged to Massie how the application of the DNA Behavior discovery tools helped advisors identify their emotional hotspots and revealed vital areas where clients’ financial conversations would need to be managed. 

An essential part of Identity is getting to grips with our emotional intelligence. It becomes crucial when financial advisors are discussing finances with their clients. Nothing disturbs emotional equilibrium more than conversations around money.

You can view a short version of the Massie/Trigleth conversation here:

Or head to our YouTube Channel to view the whole Identity conversation.

But I’m getting ahead of myself. Let me explain!

Over the past four months, Hugh Massie has been conducting online conversations with industry leaders worldwide. The discussions have circled the importance of understanding Identity regardless of the industry they lead. 

A large part of the conversations has revealed how closely aligned self-awareness of one’s own Identity and emotional intelligence are. 

So, what is emotional intelligence?  

In his book A Dictionary of Psychology, Andrew Colman defines Emotional Intelligence this way:

Emotional intelligence (EI) is most often defined as the ability to perceive, use, understand, manage, and handle emotions. People with high emotional intelligence can recognize their own emotions and those of others, use emotional information to guide thinking and behavior, discern between different feelings and label them appropriately, and adjust emotions to adapt to environments

There is no doubt financial advisors need to be able to manage behaviors and reactions that their clients have to market movement. Without this understanding, set goals won’t be achieved.

A great starting point is that advisors know themselves first. This self-awareness leading to self-management keeps the advisor very professional. Still, it also ensures their insight positions them to see and manage their clients’ behavior.

‍Remember, the pull of money is a highly emotive subject. Therefore, the more insight an advisor has into their own and their client’s response, the more likely they are to navigate clients through periods of anxiety.

So how can you increase your emotional intelligence? That’s easy. Head over to our website and complete a FREE trial. This is a perfect starting point, and if you want to talk to one of us about the outcomes – no problem, we can do that.

Maybe you think you would benefit from an Identity Conversation with Hugh Massie – let’s see what we can do to set that up.

I will continue to write something about these Identity interviews with these industry leaders. What they are sharing is GOLD. 

Interesting for us is the common thread, i.e., when individuals know their Identity, they can manage money conversations at a whole new level. As a result, they and their clients tend to make significantly better decisions – about money and finances and other things – that could negatively affect them.

Financial DNA Empowering Female Voices

Earlier this year, I sat down with Danny Liberatore from The Wealth Enrichment Financial Group to discuss the impact Financial DNA has had on his practice, and how it transformed the way he works with his clients. 

Working with female investors

One of my biggest takeaways from our identity conversation was Danny’s approach in working with female investors. He mentioned that most of his clients are females and that Financial DNA insights have enabled him to foster meaningful relationships with them.

You see, female investors don’t want to be treated any differently than men, however, their communications styles are different. They want to be part of the process. They have a savviness for the intricacies of our work and appreciate the educational part of it all.

Danny Liberatore

Behavioral finance insights particularly come into play in this situation when you are working with male and female partners. Their dynamics unravel from day one, and you need to pay attention to their behaviors in order to understand them better and manage their biases.

Involve both in the conversation

Danny shared with me that most of the time, the women are different from their partners, in terms of behavior and responsiveness. 

It is no secret that the financial service industry has done a very poor job trying to understand women and genuinely helping them. What happens more often than not is that they are being ignored and their opinions are unsolicited or unappreciated. 

As a financial advisor, you need to be able to wear different hats when working with couples. When you make the effort of explaining things differently to your clients and accordingly to their behavioral styles, you get instant breakthroughs. 

Danny mentioned that he’s made it a habit to always address the wife first and disclose to the husband that while he might be addressing him later on separately, he doesn’t want him to feel ignored or unappreciated. He will ensure to bring the husband back into the conversation and keep her engaged.

The truth is, once you honestly explain your process, your clients instantly feel included. It not only puts them at ease, but it builds trust. And we all know that trust is a fundamental factor in advisor/client relationships. 

This is a common situation for FI’s to find themselves in. When the female is not the breadwinner or the creator of the wealth, you’ve got to make her even more involved, without leaving the male out either.

How it usually starts 

When meeting with a potential client for the first time, pay very close attention to the couple dynamics as they unravel before you. It is common for men to take on the lead role in a conversation with their advisor, especially at the beginning. 

However, if it gets to the point where the female’s opinion is not taken into consideration or is not solicited at all in the planning process, that should be a red flag for you. You need to make the effort to always keep them engaged and involve them in the conversation.

You can also look at it from a business perspective. Let’s say you are taking on this new client that has great assets and potential for revenue growth. If you strictly focus on working with the husband, when life happens and you find yourself in an intergenerational wealth transfer situation, what are your chances to still be the financial advisor for that family? 

Final thoughts..

When working with your clients, it might feel normal to engage the one partner that takes on the role of leader and simply overlook the other. The risk you are running there is to not only alienate one of the decision makers but also falling victim to your own status quo biases. Pay attention to your client’s dynamics, keep both of them engaged, and build what could potentially be a lifetime working relationship.

dna behavior community

Who Is Your Community and How Are You Influencing It?

– First Published on Nasdaq –

In many ways, the pandemic denied us access to the ever-important concept of “community.” We had to find new and innovative ways to stay in touch with others.

Still, there is no true substitute for one-on-one or one-on-many connections. Especially those with a range of people with which to build relationships and community.

So, as I conclude my look at what it means to live a quality life, I’m reminded that if 2020 has taught us anything, it should be the importance of having deep social bonds and meaningful relationships. Again, community.

Setting life goals

Along with my growing band of online social network connections, I have deliberated on our life goals, what we want to accomplish and where and how we want to invest our money, realizing that finding the answer to these questions has required each of us to dig deep into our DNA, including the behaviors that drive decision-making, support values and fulfill personal ambitions.

Setting clear life goals is beneficial in several ways. However, setting life goals that make a difference in the world is trickier.

As I review past goals and begin crafting the way forward with a focus on community, I find myself looking to my behavior and asking why I am drawn to certain projects. I am a strategist with a strong drive to reach key goals, based on sound knowledge, high quality processes and quality control standards.

This inherent behavior is not at odds with how I have been going about my quality life. I don’t need to change my behavior, but what I find myself doing is realigning what I have always wanted to do with my life. This past year of isolation has brought that realignment to the fore. So, how to adjust my personal, financial and commercial goals more intentionally to achieve a quality life?

When life goals are based on our values, they are meaningful. When they align with our behavior they allow us to pursue authentic aims of our own choosing and enjoy a feeling of achievement when we get there.

The more I have considered my life goals, how I invest and where I invest, the more I recognize I am charting a course for the next season of my life.

Underpinnings of behavior

My community is more than neighbors or supporting environmental issues; these are a given focus. My community is industry leaders, individuals building a business, and – top of the list – captains of industry facing high-stakes interactions where understanding the behaviors at play will drive solutions for them.

If I’ve learned anything over the past year, it’s that the motivating force beneath any and all behaviors is money.

Business leaders, advisors and investors are now recognizing the influence of behavior and money attitudes on life, and on financial and business performance. Increasingly, a person’s financial behavior is being seen as a derailer of decision-making and relationships, not to mention the achievement of life goals.

Here’s how I’m working on achieving life goals, aligned to passion to support my community: Over the past few weeks I have been conducting one-on-one online conversations with key leaders and professionals representing a wide variety of industries.

The purpose is identifying how their talents and individual EQ plays a role in maximizing their impact and what they have come to understand about their behavior patterns. In every case, so far, there has been a significant moment when understanding their behavior changed the direction of their life.

Big questions lead to simple questions, answers

In all cases each wanted to finish their working day believing they had made a difference for good. So my question to you is this: Who is your community and how are you influencing it?

kim curtis identity interview

Identity Conversation with Hugh – Facilitator of Difficult Life Conversations

Have you ever wondered why smart people make bad investment mistakes? Or how can you work towards reaching financial independence?

In this identity interview, Hugh sits down with Kim Curtis. She is a personal finance expert, author of “Money Secrets” and Founder and CEO of The Wealth Legacy Institute, Inc.

With her rich background in negotiation and mediation, as well as legal and extensive financial education, she offers successful individuals and families a multi-disciplined approach to wealth management, investment management, and family dynamics.

Kim Curtis has been using our Wealth Mentoring Package. With 93.6% wealth management being about behavioral management, Kim has succeeded in leveraging the power of behavioral insights to facilitate life conversations with her clients. If you’re interested to learn more, start our 14-day free trial and see for yourself.

Recognize, Break Away From Herd Mentality

– First Published on Nasdaq –

one of the challenges financial advisors face is the tendency for their clients to come to them already influenced by “group” think or herd mentality.

“Everybody is buying XYZ; I need to get in on this!”.

“No one is staying in International Doodads. The guys on my Pickle Ball team say I should get out of that and lean into derivatives.”

Clients know the importance of seeking advice from qualified financial industry professionals yet can make life-changing decisions based on a night out with friends or the sensational advice of a grandiloquent radio host.

And, yes, sometimes otherwise smart investors are persuaded by the comfort of a crowd. After all, the advice may come via a relationship through whom they get trusted advice on many other areas of their lives. Or from someone seen as successful…so the advice must be worth following, right?

Coming out of a divisive election year, herd mentality is at the forefront, beyond just the financial sector. So, we have it in perspective; it just should not be part of your investment strategy.

Core insights, core advice

Clear thinking requires financial professionals to be able to understand where enthusiasm for an investment or disinvestment is coming from and how to respond to a client’s bias. An advisor must help that client pivot their thinking in a positive and safer way, visualizing the situation from a different perspective. This, in fact, is a core reason for having a financial advisor or coach.

So how can a financial professional do this? Do they know bias can be revealed?

Financial advisors who are serious about understanding the client behavior invest in a behavioral component for their existing tech stack. The benefit: Revealing a depth and breadth of insight into their clients.

Behavioral insights also alert advisors to those clients who react in the moment and revert to long-held beliefs that often hurt their returns. This could be panicking and selling or excitedly panicking and doubling down on exactly the wrong investment.

Mining for insights

We all know the importance for advisors and clients to separate emotions from investing. But, again, how to actually do that? The trick is learning enough about inherent biases to be able to manage them.

Without that information folded into their workflow, advisors may find themselves locked in emotional exchanges with their clients. Or at least unable to move a client off a damaging commitment to the wrong vision or ill-informed advice.

Behaviorally smart advisors understand that everyone reacts differently to turbulent markets. Having behavior tech insights into a client, they can coach and educate their clients – and do so in ways tailored to each client – to move beyond herd mentality.

Using a behaviorally smart financial discovery, an advisor will know of client biases from the get-go. They will know which clients are likely to field bad advice and take it to heart. Best, they’ll be well-prepared to keep clients from jumping on the latest bandwagon.

The client also would be the beneficiary of these insights, so they can “check themselves before they wreck themselves,” as my mentor, Hugh Massie, likes to say. So, don’t think of behavioral insights as something the advisor holds close; there are insights about the advisor and about the client and all should be shared with each.

Breaking away from the pack

Herd mentality is a dangerous bias. And there is a clear responsibility for financial advisors to ensure they provide clients with highly individualized guidance.

If they are indeed armed with behavioral insights – on themselves and, especially, on their clients – they can even provide proactive guidance when client information might not be congruent with other, external perspectives. 

When an individual and their advisor are equipped with quantifiable insights, they can recognize and break free from the herd. After all, investing is not a group sport.

Taking the Mystery Out of Investor Behavior

As we all know wealth mentoring entails helping your clients achieve greater financial goals. You provide them with guidance and assistance that unlocks their full potential, manages their emotions, and allows them to live with meaning. Which raises 2 questions: what is your role in advising clients? Is it to help them manage their behavior or to get the highest maximum performance?

I have always said that financial planning risks are the sum of human behavioral risks (client and advisor) and market risks. Our whole Financial DNA program for investors and advisors has been predicated on this. Whilst the market itself cannot be managed by a client their reaction to it can be which comes back to human behavior management. There is university research which shows that 5% of a person’s wealth comes from their investments and 95% from their behavior.

I do believe 75% or more of our role is to save clients from themselves by helping manage their behavior. This involves educating, guiding, coaching and empowering them. What we call “Wealth Mentoring”. By adopting this approach you will be helping your clients obtain superior returns which far out weigh any level of fees that you can charge. The reality is that the key to successful investment is managing behavior.

Wealth Mentoring Transforms the Client Experience and Enhances Value

For the Wealth Mentoring approach to be successful the advisor must transform the client experience they provide. The client needs to experience the feeling that their life is more than money, their money has been humanized, a sense of improved relationships, discovery of life purpose and meaning, and finally a tailored portfolio built from the inside out. Then there must be an ongoing development experience involving wise counsel with the client knowing they have an improved quality life. Understanding their behavioral style and preferences is fundamental to all of this. Behavior shapes life decisions which in turn influence financial decisions. The linkage is very close.

Importantly, the value proposition to the client needs to be communicated. There are many tangible and intangible benefits of this approach. Research shows average mutual fund investors will over a 20 year period do themselves out of nearly 60% of the return produced by the average equity mutual fund. This means the average investor will significantly underperform the market and his own investments. So, if the average mutual fund return over the last 20 years is 10.81% and the average equity fund investor has averaged 4.48% then there is a 6.33% difference which represents the cost of not having a good planner. Hence a financial planner charging fees of 1% per annum and/or a retainer is very good value.

What is great is that now we have turbulent times lots of other leading commentators are coming out of the woodwork and giving this message loud and clear. We are at the start of a cultural revolution in the role of advisors in financial planning and the investors attitude to it. A revolution that is client centered and one from which everyone who plays the right game of managing behavior will be big winners. The philosophy of Understanding People before Numbers is here to stay.

The Advisors Value Proposition of a Wealth Mentoring Approach

We have recently performed a research of 100 advisors with AUM over $50m. The conclusion is that far more client discovery could be performed and there is plenty of scope to introduce more fee based services which address the life of the client.

In my view what is ever good for the client will generally be good for the advisor in the long run. Lets look at why a behavioral “wealth mentoring” approach is good for the advisor’s bottom line let alone the credibility of their financial planning process and business.

The ROI for an advisor of adopting a systemized behavioral approach is driven by the ability to aid advisors in:

1. increasing client acquisition rates
2. increasing wallet-share among existing clients
3. providing the justification for higher advice fees
4. increasing client retention rates
5. improving advisor productivity
6. increasing the business value.

Advisors who integrate a behavioral system into their practices find that they achieve these ROI goals by:

1. Establishing trust more rapidly with prospective clients through anticipating their communication, investment, and lifestyle needs

2. Gathering more assets from existing clients by positioning themselves as the client’s trusted advisor. Wealth mentoring facilitates client interactions that go well beyond investments and provides the basis for a deeper relationship with each client.

3. Supporting higher planning and advice fees through the offer of a powerful discovery process. Financial advisors may also use client centered systems to add new revenue generating services such as couple or family facilitation, executive life balance programs etc.

4. Improving relationships with problem clients. Advisors often struggle with a segment of their clients because their natural behaviors differ greatly with those of the advisor. While advisors may keep these relationships in good times, rocky markets require more careful facilitation to help clients feel understood.

5. Advisor productivity increases because once you know the behavior of the client it is easier and quicker to identify their needs, manage them and keep them committed to a plan. Alot of time can get burned for an advisor dealing with client changes and problems after year 1 which could have been addressed up-front.

6. Greater documentation of who the client is enables relationships to be transferred to other people within the practice and also when it is sold. This has a very positive impact on business value.

In terms of metrics, here is what we base the wealth mentoring value proposition on:

1. We have seen trends that advisors who adopt a client centred methodology are increasing their gross asset under management revenues by 25% or more per annum from new clients. Further, we are seeing them increase their fee for service revenues by 15% or more per annum. Also, there is enhanced client retention. Of course success from using any system is also up to the effort of the advisor.

We believe it is possible in respect of an average practice to help the principal advisor double their net take home profit over a 4 year period. This is achieved from segmenting the client base so it is fundamentally more productive and building the AUM and fee for service revenues from the top 100 or so clients. This is a substantial return on investment from our costs and the coaching cost.

2. From point 1, there is the ongoing business benefit that the increased revenues and profits translate to increased business value on sale. What we have also seen is that the behavioral data enables greater transferability of clients which is fundamental to the business value as revenue and profit sustainability post the sale are fundamental to the value.