Take Fresh Look at Alignment of Career and Life Purpose

– First Published on Nasdaq –

Having a purpose in life that lines up with a chosen career is what many strive for and rarely achieve. Why is that?

Maybe it’s as simple as having allowed yourself to follow the career expectations of others, only to later find life experiences, wisdom, or an event (like a pandemic!) exposes cracks in the alignment between life purpose and chosen profession.

For many, the past year has caused them to take a hard look at their life purpose and ask the questions:

  • Why am I building wealth?
  • Is this my chosen career?
  • Why am I endeavoring to achieve the next promotion?
  • Why am I allowing life to hijack deeply held life goals and purpose?

Learning from the past

As I look back on my own journey, I often joke, saying I am a “reformed CPA,” but I seriously am. Having initially had a successful career as a chartered accountant in Sydney, Singapore and Thailand, and later in the financial services industry (running my own wealth management business), I always knew my career was more than about me conforming to a way of life.

That is, conforming to the script of have a good job, buy a house, invest and increase wealth. I think you get my point. But in reality, I always recognized something was missing.

My talents made me successful in my chosen careers but did not fulfill my passion, vision and values which I wanted to define and articulate in my life purpose.

I can’t say I was overly navel-gazing or looking for meaning in life; it was simply a deep belief that something more was going to be my career and purpose. The trouble was I didn’t know what.

Getting back to basics

I began to realize that if I wanted to discover my TIPS (talent, identity, purpose and significance) and get my career and life purpose aligned, I would have to do something about it myself. Hence the birth of DNA Behavior.

I recognized that using a behaviorally smart scientifically based discovery system I would be able to uncover areas of my TIPS that were not being recognized or used in my career – or toward my life purpose.

So, some 20+ years ago I founded the DNA Behavior business. It became clear to me that everyone should know and be able to share their unique “DNA style” with family, advisors, leaders, employees and clients. I knew that if everyone could share their unique style, the world would be a better place and careers would be chosen that lined up with living a quality life and inherent passions.

What I discovered and have spent the intervening years pursuing: My purpose and priorities lay in helping people the world over become more self-empowered through greater self-awareness. What I found is that I have a knack for discovering and making practical, unique behavioral insights, particularly in the still-new, still-underutilized field of behavioral finance. This is a much stronger calling for me than providing accounting and financial services, investments, and managing real estate.

The highly validated, scientifically based, structured approach to understanding behavioral insights for identifying talents, career paths and life purpose helped me discover my passion and now does the same for millions of people globally.

There is of course an irony – and a win-win – to the fact that my personal discovery and pursuit of that will enable the same for others. Of this I am doubly grateful.

And this is not a sales pitch; rather, it’s sharing an experience about discovering life purpose and making a career from that discovery.

Sometimes life intercedes

During the past year I have spent socially distant or remote time with countless people who are questioning many aspects of their lives. Now many are reviewing their career. Not because they have lost their job, but because they’ve had time to work from home with their family and have begun to “taste” a quality life.

They want to do life differently. They want to use technology to be able to have choices about where and when they work. Even more have commented on how successful conversations have become with their advisors as many financial advisors are themselves questioning their quality life.

One common theme in these conversations: It seems creating significant wealth is no longer their “true north,” not because they don’t want wealth but because they genuinely cannot find its purpose in their lives.

Wealth is great, but not at the sacrifice of life purpose. Why not have both?

Know yourself, then help clients do same

Discovering a life purpose that becomes a satisfying career needs to follow a well-defined approach that begins, not necessarily with qualifications, but with knowing self (talents, strengths and struggles). Focusing on those factors that reveal inherent behavior is crucial before setting personal life goals that enable you to take control of life in ways that optimize performance and happiness.

This approach to building a career based on life purpose is a strategy you can take to your clients as part of discussing financial planning and investment strategies, because many are searching for purpose and meaning. Even better if you lead the discussion with how you have rediscovered yourself, re-examined your goals and re-aligned key life facets like purpose and direction.

Your Firm Isn’t Ready for ESG – Prove Me Wrong

For years, the DNA team has been writing about how the world is moving to a place where everything is hyper-personalized for every customer in every interaction. Lately, firms have been approaching us for the most personalized investment service we have seen, ESG investing. Are we finally here? Is everything personalized yet? I think not.

Firstly, I love the personalized approach to ESG investing. The ability to customize services at scale and deliver unique investment experiences to each client will be beautiful. However, in my opinion, FIs are starting to segment clients in the wrong way. Most firms are focused on segmenting clients into ESG buckets before they really know them.

Does your firm know how each of your clients communicates? Make decisions? Learns? Gives? Evaluate investment performance? If you are relying on your advice team to know and remember each unique client, good luck. Better luck if you have high turnover or there are poor notes in your CRM.

Working in behavioral science for the last decade, I know the data demonstrates that each person is unique (seriously, there are 4 trillion possible combinations in Financial DNA). And from being a millennial, I know that each of my peers wants to be treated as they are unique. Is your firm really ready for this? Does your firm really have the ability to treat each person as unique?

A 3-Dimensional challenge for your firm, are you ready?

ESG investing adds a 3rd dimension to the investing picture. While we currently operate on 2 dimensions, most firms only do 1 of those well. The 3 dimensions: First, there is the obvious investing dimension (dealing with the performance and investment vehicles themselves)… most firms do this well. Second, there’s a human dimension (dealing with the market impulses of clients, building engagement with the FI or advisor, addressing client communication needs, and decision-making habits)… most firms do this poorly. Now, firms are adding this ESG investing dimension (layering on the environmental, social, and often times political values and beliefs to their investments.

I will explain this further with my two friends, Kelly and Mike.

Dimension 1: Investments
From an investment picture, Kelly and Mike bring equal parts to the table but have little investing experience, except their 401ks. Kelly recently had a windfall from her inheritance and Mike cashed out equity from the IPO at his company. Both plan to work until their mid-60s, so they have about 25 years left to generate wealth.

Dimension 2: The human dimension

Californian, born and raised. Kelly’s stickers on her Prius could tell anyone what she believes in and the causes she supports. You better believe she composts everything and even carbon offsets her vacations. Sound like someone you’d hang out with? Well, Kelly and I have many things in common, one of which is we are both cautious. As a third-party to Kelly, I see this everywhere. Her caution in her career, her clothes, and even in her 2011 car. She accounts for every dollar she earns and is perfectly content with living in her modest 2 bedroom, single-family home with Mike for the long haul.

As luck would have it, opposites attracted Kelly to her husband, Mike. While Mike and Kelly share many views on life, their values, and their love for the environment, they couldn’t be any more different from a behavioral perspective. Mike loves his Tesla, but in contrast to Kelly, primarily because of the 0-60 speed. Mike works in SAAS sales, not for the love for tech, but for the challenge. Mike seems to be in his prime at the end of the quarter where he is below his quota and the pressure is on. Mike loves taking risks for the reward.

Working at DNA, all of us get our own friends and family accounts, and believe me, they get used! Like all of my friends, I forced Kelly and Mike to take their Financial DNA discovery. Kelly is an Adapter, 15/100 risk profile, and a Group 2 “Ultra-Conservative” investor. Mike is an Influencer, 87/100 risk profile, and a Group 7- “Aggressive” investor.

Dimension 3: The ESG Dimension

Kelly and Mike both have a love for the environment. Kelly more so than Mike, but nonetheless, they have both agreed to do everything physically and financially possible in order to make a positive impact on climate change. From a financial perspective, can your firm manage this complex, 3-dimensional ESG scenario? The reality is, Kelly would be best suited to invest in stable (but eco-friendly) investments while Mike will be constantly benchmarking their portfolio against the S&P 500, looking for a win. How would you manage this situation?

From my behavioral finance lens, many firms are not ready to deal with the complexities of this third dimension, because they haven’t mastered the human element yet. Firms are trying to tackle a one-size-fits-most approach with ESG. The reality is that all clients are different, but most firms lack the behavioral finance data to tell them apart.

Prove me wrong. I’d love to hear how you would behaviorally manage Kelly and Mike and deliver them an ESG portfolio.

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.

Advisor-Client Chemistry

Do you have the right clients? This is a very topical issue for many financial planners, particularly those who have already built a business to a reasonable level. Actually, it is as important as the client selecting the right advisor.

In the end there must be a mutual relationship with the parties comfortable with each other. The relationship cannot start out (but it often does) with the client simply having dollars in the bank account and some financial planning needs, and on the other side the client believing the advisor has the skills and the necessary integrity. In fact, these are all assumed to get to the point of the first meeting.

Our business is all about looking at the behavioral style of the clients and also the advisors. So, not unexpectedly, the approach we take is to match clients and advisors based on their behavioral style. This is very much an inside-out approach, however all great relationships start below the surface. Human behavior is at the core. The great thing is that the Financial DNA system measures natural behavior which means we can reliably predict the behavioral style of the advisor and client in terms of how that person will always be, particularly under pressure. I would say that our approach must still be blended with a number of other more traditional selection factors such as client size, service style, values, expertise, etc. that are mentioned in Bob’s article.

To help the advisor we have developed an Advisor/Client Compatibility Matrix. The matrix is a one page grid which matches profile styles based on the level of modification that will be required between advisor and client. To be clear, it does not say you cannot work with someone, but it does say who will be easier (green box on the matrix) based on less behavioral modification – this is where communication, chemistry, etc. is likely to be higher. Hence, this is where the relationship will be naturally more sustainable over a longer period with less stress. So if you are an advisor wanting to segment your client base a reliable starting point is now provided.

I do not necessarily advocate that you fire those clients who will require more behavioral modification (red box on the matrix). This will be a warning sign that you have to put more work into adapting to maintain the relationship. Although what you may wish to do is allocate these clients to a partner who is different to you or hire someone who is different to you to provide a complementary style. Many advisors have found this approach to be foundational for selecting their next hire. Or in how they deliver client service with a team-based approach. Hence, the planner may get the relationship started and then another person on the team steps in.

Are you interested in the value of your practice? Importantly for advisors, this approach also helps you to identify to whom you sell your business. The sustainability of the relationships and hence the revenue is critical to business value.

Does My Advisor Understand His Own Bias (Digitally)?

– First Published on Nasdaq –

I recently had an interesting conversation with an investor who had attended a behavioral finance webinar.

He shared that his advisor’s level of communication had improved dramatically – from being less tolerant and on occasions showing bias – to having a meaningful conversations about life-goals and how to tolerate sudden market movements. “I finally felt I was genuinely being coached instead of being bullied,” he said.

It seems the advisor’s firm had recently invested in adding a behavioral tech solution to its advisor portal. The client recalled completing a 10-minute questionnaire and learning more about his investing and spending habits. In addition, the advisor now had access to a range of dashboards and personalized information that enabled him to respond to his client’s specific goals, wants and needs digitally.

The investor was more than happy to see the level of communication lift and to have the advisor considerably more focused on his individual needs. He also noted it was the advisor’s own lack of bias that was the most notable.

I pressed the investor for an example or two.

“I’m a cautious investor,” he told me, “in fact I’m risk-averse and likely to respond to troubling market movements by selling, probably at the wrong time, but that’s who I am. I always felt my advisor had an edge of criticism when I shared my concern about uncertain markets and how they would impact my life goals.”

He went on to say that the advisor, through understanding him at a deeper level and checking his own bias (the advisor is a comfortable risk-taker) now understands how his previous responses to the client’s risk aversion was at best naive and at worst unprofessional.

Understanding, overcoming bias

This exchange got me thinking about the impact of Diversity, Equity and Inclusion (DEI) in the financial services industry. When individuals are not aware of their own behavior and their own communication style, conversations can become toxic. Unintended, hidden bias is often the culprit.

That’s why doing everything possible to create an insightful human connection is so vital to so many business relationships, certainly including the financial advisory-client relationship.

Ultimately, we are all relying on a variety of video conferencing and other chat and tech platforms to conduct our business these days; however, when behavioral science guides the tech stack, inherent behaviors can be revealed in an instant digitally, making remote communication richer and more effective for all involved.

No longer is an advisor relying only on memory or CRM notes to refresh themselves on client behavior and how they might best respond to such. Behavior tech enables the advisor to know and understand natural behavior insights in real-time. By doing so they can better help the investor-client recognize that their behavioral biases are at play, providing perspective and, if needed, redirection and other tailored counsel.

These tools also can remind the advisor of their own bias and provide keys to remember when working with the client. This type of interaction creates a trusting relationship and reinforces the “know your client” fiduciary role to which responsible advisors are committed.

Feeling seen and understood

Unintended, unaddressed DEI issues are often at play when a professional conversation between an advisor and client leaves one or the other feeling stung or unheard. Consideration must be given to eliminating anything that causes confusion in a conversation because it can derail the interaction and even the entire relationship.

When a client feels behaviorally understood by their adviser, the relationship will flourish. Having insight into a client’s preferences, bias, communication styles and of course their “financial personality” reinforces the importance you as an advisor place on the relationship.

We all have blind spots. Most can be tolerated. However, those blind spots born out of ignorance are not ultimately acceptable, especially when there are tools to reveal and help correct. Add money and emotions to the equation and blind spots or bias can certainly harm or end client relationships. However, the client before and after experience above demonstrates that advisor-client service informed by validated behavioral insights is not only beneficial and powerful, but can actually save a relationship.

We can no longer sit back and tolerate a deafening silence on DEI, even if – or especially if – it is revealing itself via seemingly small but relationship damaging (or killing) occurrences. If nothing else, this recent conversation made me realize that the issues of diversity, equity and inclusion are part of the very fabric of all we do.

How will you spot advisor-client bias? How will you address it?