Financial Planning

Are You Dehumanizing Advisor-Client Relationships?

– First Published on Nasdaq –

The phrase Artificial Intelligence (AI) was likely first used by computer pioneer John McCarthy in 1956 at a Dartmouth College conference. And the concept of AI was even on the minds of classical philosophers as they delved into human thought processes.

Today we usually think of AI as computer systems mimicking human behaviors. But do they?

Many such computers are part of business efficiency and there is certainly a place for them. It is, however, important to understand that such systems, introduced in the name of efficiency and economy, often dehumanize the organization and the resulting service provided.

AI and API, but also y-o-u

People are unique, they respond in different ways and they are diverse. Financial advisors and other professionals must have the insight to understand that people – their client-investors and others – have strengths, struggles, biases and indeed breaking points that differ from person to person and situation to situation.

And even the smartest, most experienced advisors and clients only have so much insight, as our perceptive powers often cannot “see” or be aware of innate behaviors. Those go-to behaviors we all have and of which we may not even be aware…that surface naturally, often in times of stress or decision making.

So, just as behaviorally smart advisors understand the limitations of AI, they also understand their own limits of insight. But how to bolster human insight to best serve clients?

Whether intervention comes in the form of understanding emotional reactions to market movement, knowing when a simple call can head off a foolish decision about to be made or something else, advisors need to have significant amounts of insight into their clients in order to offer effective, consistent professional service.

But wouldn’t it be interesting to have both? A machine approach that not only gathered data and offered a range of financial insight, but also revealed human performance, emotions, bias and reactions and prompted the advisor when a client’s behavior (especially decision making) needs addressing?

A personality API (application program interface – think of a “plug in” for existing tech systems, then think of it providing personality insights) can give your data a human element, measuring behavioral insights covering virtually every human habit.

Roberta Smith on line one…

Picture this: You get a phone call from Roberta Smith, who wants to sell a significant stock. This is a big change and you don’t want her to act hastily. You need more information – and insight – regarding what’s driving this decision.

As you access her data on your system, compliments of that handy-dandy personality API, you see that she has a bias toward loss aversion. Not only that, but the behavioral data you have on your API reveals a range of different dimensions of Roberta’s natural style for making life and financial decisions, including her risk-taking behavior.

With the assist from your personality API in hand, you not only quickly access information about Roberta’s biases, but also her goals, spending patterns, risk stance and much more. Such a behavioral management tool gives you insights Roberta may not even have about herself.

Remember, your API is helping delve into innate client behavior, “farmed” when someone like Roberta takes a quick discovery at the very beginning of your initial work together. It may go without saying but is always worth repeating: AI is built on data, and part of the data populating a personality API would include Roberta’s input from her discovery tool.

Armed with client-specific human behavioral insights especially focused on finances and financial decision making, the advisor can safely continue the conversation with Roberta, knowing what’s driving today’s call. You can confidently – insights in hand – and in a tailored manner – because your insights also tell you how best to communicate with Roberta – steer her away from making decisions that will adversely impact her portfolio and life goals.

And this is no secret information, surreptitiously used. After all, you’re not manipulating Roberta, but creating a win-win. Back when a client like Roberta completed the discovery, you would have had a robust discussion around the added advantage you (and she) has by adding “behavior tech” to your other tech and tools.

Human and, not human or

There is no need to dehumanize relationships. AI has a significant place in the financial advisory business, but it must be partnered with behavioral data gathering and linked with API for instant access.

After all, AI and APIs are not replacing you. Rather, they are helping you take clients like Roberta to next-level, best-in-class advisory services.

Do Investors See Value in Wealth Management? They should, and Here’s Why

Do Investors See Value in Wealth Management? They should, and Here’s Why 

The 2020 financial climate may have been the most tumultuous of its decade. However, one thing is sure, demand for wealth management continues to grow. Today’s investors are looking for a comprehensive approach from financial institutions that would guide them forward in this new normal.

The truth is, even in the middle of this pandemic-induced uncertainty and market volatility, executive wealth management decisions were still being made. If you believe that your investors may not see value in wealth management, here’s why they should.

Financial Institution Can Adopt the Model That Fits 

While you might think that the biggest struggle is to have a breakthrough with investors, and enrolling them in your financial planning systems, the real question is where do you take it from there? 

As a financial institution, you have the ability to design your systems and incorporate wealth management components into your practice. Which makes more sense for your investors as they tend to seek out a more holistic approach. 

You see, investors are looking to discuss their entire financial vision with their advisors. Their short term goal is obviously to make smart decisions and see a substantial return on their investment. Their ultimate goal however is none other than prosperity and financial wellness. 

Investors Are Looking for a Financial Wellness Roadmap 

The financial bigger picture has never been more relevant. The pandemic-induced market uncertainty has shaken investors’ confidence in their portfolios and challenged all their strategies. The type of financial institutions they are looking to work with are those able to offer them some clarity and insight into their financial wellness roadmap.

Whilst the unpredictability of the stock market can challenge that concept, it’s all about the relationship your advisors foster with their clients. Here at DNA Behavior we believe that advisors should constantly engage their investors in discussions relevant to them, or risk losing them. 

Wealth Management also Means Behavior Management

You might be asking yourself is it our role to help investors get the maximum profit? Or to manage their behavior?

We believe that wealth management and financial planning risks are at the sum of human behavior (investors and advisors) 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 an investor, their reaction to it can be. Which comes back to human behavior management. 

75% or more of your role is to save investors 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 investors obtain superior returns which far outweigh any level of fees they are being charged. The reality is that the key to successful investment is managing behavior. Wealth mentoring has the ability of transforming the investor-experience and enhance value.

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.

Leadership

11 Leadership Styles That Shape A Winning Organization

Building and shaping the culture of an organization begins with the behavior of the leaders. When leaders are behaviorally smart, and understand their leadership and communication style, they are more likely to set the kind of example they want everyone to follow.

There is no one leadership style fits all. The key, through self-awareness, is to find the balance that works with the teams you lead.

The Fast-Paced Leader

A leader who is fast paced, logical, challenging and tends to be critical may well deliver results, but can damage the talent they are responsible for leading. This style of leadership births a culture of stress, staff turnover and unwillingness to want to work under their leadership.

The Analytical Leader

The analytical, systematic, rigid, work by the rules, style of leadership may be a gatekeeper in terms of the processes of the organization, but can shut down innovation, spontaneity and the kind of creative approach to decision making required when things go wrong. This inflexible and rigid style of leadership does not inspire a culture of shared goals, thoughts and ideas.

The Skeptical Leader

In today’s rapidly changing market, businesses need innovation to survive. A skeptical leader who is not open to ideas, continually questions, is guarded and fails to build trust with their teams, will not create the kind of innovative culture that breeds success. Finding a successful balance between trust and a healthy skepticism that protects the business is tough.

The Competitive Leader

Similarly, leaders whose focus is solely on results, who is very competitive and wants always to be the one who sets the agenda, can push teams too hard to achieve goals. If these leaders see targets slipping away they can become manipulative and assume a driven style of leading that causes teams to crash and burn. This approach leads to a toxic culture – very difficult to recover from.

The Peoples Leader

Leaders who are highly people focused and expressive, can inspire passion and purpose, but if this style of leadership is not based on a foundation of a clearly articulated vision and mission, the culture they create is one of chaos and confusion – but fun. Leaders such as this need strong boundaries and need to learn to focus on one goal at a time.

The Risk-Taking Leader

Some leaders are comfortable with taking risks. They know their limitations and are comfortable with managing failure. However, when risk taking leads to over confidence, leaders will cut corners placing the business in jeopardy. Further, team members assume the culture of risk extends to them. This can lead to outlier behavior as they take inappropriate risk that undermines the organization.

The Creative Leader

The highly creative leader embraces new ideas, can be quite abstract in their thinking and open to imaginative approaches to decision making. However, such creative ideas need to have value, they can’t be random as this leads to a culture of anything goes. Creativity in leadership works when it’s part of a culture that is sensitive to teams, colleagues and the overall needs of the business.

The Cooperative Leader

Not many organizations survive on a cooperative style of decision making. When a leader is seen to be compliant others very quickly take advantage of them. They may well be able to communicate the vision and encourage input from teams, but without their own understanding of how to be behaviourally smart, this style of leaderships leads to the loudest voice getting their way. Further, it can lead to a culture of frustration as the leader seeks everyone’s opinion before making a call.

The Reserved Leader

Generally, the reserved, reflective leader tends to be a loner. They do not have an open-door policy and can be withdrawn. This style of leadership breeds a culture of suspicion and can lead to more outgoing team members driving the culture and making decisions that are inappropriate. However, when the leader understands the importance of building relationships, this style of leader is likely to be much more accurate in their instructions. They prefer to get things right first time and will reflect and focus on this.

The Patient Leader

When a leader is overly understanding and tolerant there will always be others who will take advantage of this. A culture of leniency will prevail and mistakes will be repeated leading to frustration and discontent from team members. Generally, this leader tries to create a culture of stability, believing that everyone will function more effectively within the environment. This approach only works when everyone has knowledge of each other’s preferred environment for working, otherwise the culture will be too relaxed.

The Spontaneous Leader

Spontaneity challenges many people who prefer leadership to be structured and predictable. A spontaneous leader creates a culture of impulsiveness and lack of planning and forethought. Spontaneity panics some people and can lead to disruption and stress in the workplace.

A Leader who can create a successful organization culture will not only understand their own natural behavior and how to manage it, they will invest time gaining insight into the behaviors of their teams. When they achieve this balance, the culture they create looks like this:

  • There is a shared vision – communicated in a way that everyone feels valued in role for delivering it
  • There are high levels of personal confidence
  • Everyone has a can-do attitude
  • Teams collectively look for solutions
  • The leaders listen to other ideas and suggestions
  • The individuals feel motivated
  • Attrition is low
  • There are clear goals and everyone knows where they fit in delivering them
  • Success is shared
  • Trust goes both ways
  • There are quantifiable measurable outcomes that demonstrate the culture of the organization

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

As a Financial Advisor, how do you advise Entrepreneurs

Advising Entrepreneurs, as a Financial Advisor

A good idea, a solid strategy, an understanding of clients genetic makeup could be a ticket to their success. But without this insight – failure is more likely both for you as an advisor and for the client who wants to be an entrepreneur.

DNA Behavior International’s extensive research from recent academic research and studies supports the findings that a person is born with entrepreneurial genes. Providing advice to a client like this could be tricky.

A key for financial advisors is to understand the genetic makeup of an entrepreneur. What makes them tick. All entrepreneurs have similar characteristics. Their minds are genetically wired in the same way. In other words, they tend to depart from established patterns of thinking. Their resilience and appetite for risk are inherent qualities. The more mindful financial advisors are in their understanding of the entrepreneurial mind, the greater the chances of success in delivering sound targeted advice.

The Business DNA research concludes that entrepreneurs have the following genes in descending order of dominance:

  1. Resilience (Measured by the Fast-Paced trait) – they achieve results, manage setbacks and rationally take quick action.
  2. Risk Taker (Measured by the Risk trait) – confidently take risks and tolerant of losses.
  3. Creativity (Measured by the Creative trait) – innovative with ideas and seeks to differentiate.
  4. Work Ethic and Focus (Measured by the Pioneering trait) – pursues goals and is often ambitious and competitive.
  5. Charisma (Measured by the Outgoing trait) – outgoing, connects with a lot of people and influences people to follow them.

Entrepreneurs are confident, passionate and determined to succeed. They are comfortable taking the risk and will invest heavily in their business venture, maybe to the detriment of other areas of their life.

However, being genetically predisposed towards entrepreneurialism doesn’t guarantee that an individual will become an entrepreneur and then whether they will succeed. It is not just enough to be born with the entrepreneurial gene, people must do something with it. Financial advisors need to be able to dig below the surface to understand the dynamics of the entrepreneurial client and then can target advice.

Behaviorally smart financial advisors should be:

  • Comfortable being a user to test the financial validity of an opportunity.
  • Confident enough to challenge ideas and ask questions.
  • Trustworthy enough to encourage yet confront when the entrepreneur’s ideas are spinning out of control.

When financial advisors understand that Entrepreneurs are driven by the need to succeed and control their own destiny, they are less likely to put them in a client box. They won’t deliver mundane advice but will recognize the importance of getting inside the mind and genetics of an entrepreneur.

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

Entrepreneurs Cant be Lone Wolves and be Successful

Entrepreneurial Lone Wolves Can’t Be Successful

Entrepreneurs can’t do it alone. From start-up, the entrepreneur has many roles and will not have the skill set for all of them. Building the right team around them is critical to building a successful business.

Sir Richard Branson makes the following observation:
People tend to think of entrepreneurs as lone heroes, but this isn’t how it works in real life. Many live up to their reputation as risk-takers and some remain outsiders, but despite this outlier status, entrepreneurs need support to be successful. In fact, were a lot like Formula 1 race-car drivers: The person in the cockpit gets all the glory since fans tend to forget about the pit crew and the behind-the-scenes effort it takes to keep the driver on the track. Business is no different; an entrepreneur does not succeed alone.

Behaviorally smart entrepreneurs, who know their limitations, are more likely to have conversations about the skills they lack and reach out to others to fill the gaps.

Those individuals who have completed the DNA Behavior Natural Discovery process and read our significant research into Mastering your Entrepreneurial Style understand their genetics as outlined below:

1. Resilience (Measured by the Fast-Paced trait) – they achieve results, manage setbacks and rationally take quick action.
2. Risk Taker (Measured by the Risk trait) – confidently take risks and tolerant of losses.
3. Creativity (Measured by the Creative trait) – innovative with ideas and seeks to differentiate.
4. Work Ethic and Focus (Measured by the Pioneering trait) – pursues goals and is often ambitious and competitive.
5. Charisma (Measured by the Outgoing trait) – outgoing, connects with a lot of people and influences people to follow them.

 

Key TraitsSource: DNA Behavior International

More importantly, they will have a deeper insight into their entrepreneurial genes and feel empowered, through this knowledge, to bring others on board to take up some of the heavy-lifting.

As the business grows, entrepreneurs tend to feel besieged by the day to day workload. The appointment of someone, we will refer to as an Integrator, is a key first hire. Integrators should have the experience, skills, and temperament to manage the day to day business operations and understand how the entrepreneur ticks. This will ensure the business has a strong foundation. Further, it releases the entrepreneur to focus on building the business and using their entrepreneurial talents to do so.

Generally speaking, the talents are:

  • Big picture thinking
  • Creatively solve problems
  • Sees opportunities to go to market
  • Manage the pressure and risk
  • Has little patience for the day to day minutia

When the Entrepreneur and the Integrator have insight into their own and each other’s personalities, their communication style, and their decision-making approach, they understand where and when they need to modify their behavior to be a successful team.

Here are a few keys to building the Entrepreneur/Integrator relationship:

  1. Mutual respect
  2. Both passionate and driven to build the business
  3. Communicate directly
  4. Clear on boundaries
  5. Open to learning from each other
  6. Trust built on transparency and openness

Understanding each other’s strengths and limitations ensures the gaps’ are filled, and the business can move forward.

When an entrepreneur has no insight into their personality, hitting a no man’s land,’ such as dealing with day to day issues, managing 10-30 people and still trying to envision the business, they need to understand that failure is a very real possibility.

If there is no Integrator introduced, the next phase, when the business is getting off the ground and showing signs of success, will stall because:

  • It hasn’t the people to grow sales
  • It hasn’t got the innovation to keep growing.
  • It hasn’t the problem-solving capabilities

Once success is on the horizon, 30 employees can quickly become 50, 100, 500. This stage, moving into a sales organization, requiring sales systems and customer relationship management systems/processes, is where many entrepreneurs struggle. Such a level of hands-on day-to-day minutia (their interpretation) to grow can frustrate them.

This is where an Integrator and Entrepreneur working well together can take a vision to market.

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