I’ve just spent 26 hours travelling from Australia to the UK. Wearing a face mask (on the advice of my doctor).
With global anxiety on the rise and many analysts working the data to understand the impact of the coronavirus on economic growth, I got to thinking why in three of the busiest airports and two packed planes, so few people were taking the precaution of wearing a mask.
Realistically speaking, I trusted my health provider to advise me: Wear a mask, carry hand sanitizer and stay away from people coughing.
Can financial markets wear a mask?
I looked around at all my fellow travellers and staff and wondered what advice they had been given about protection from the virus, and why so many seemed oblivious to the potential threat.
This got me thinking about what their reaction might be as I read the financial headlines. Headlines across the world that are not giving much hope to investors, nor to entire economies. I wondered if those same people choosing not to wear masks would be quite so nonchalant watching their life savings plummet.
Maybe the health advisors knew their patients so well that they called them and assured them that, according to the data they held about their health, with their strong immune system they would be okay!
Still, shares on Wall Street fall, scream the headlines. World markets are seemingly in freefall. Not a good time for financial advisors to be dealing with clients who see their life savings tank.
So, what of the financial industry? How are advisors going to stop the inevitable panic of their clients as they see markets tumble? How can they steady the ship?
“Behaviorally smart” advisors to the rescue
While the financial industry rushes to understand and interpret its data, behaviorally smart financial advisors who have invested into the DNA Behaviors Financial Personality Discovery will have learned more about their clients unique financial personalities and the power of these insights enables them to serve clients more effectively. Particularly during times of market volatility.
Markets cannot be predicted by advisors and investors. The role of the advisor should be about managing the behavioral biases and responses of their clients. The behaviorally smart advisor is in a key position to influence the reaction of clients.
As human beings we all have certain decision-making biases that are hard-wired into us from early in life. These hard-wired behavioral reactions to market activity can be predicted, as they are inherently part of our “DNA”, which is scientifically measurable.
The biases will usually reveal themselves in times of higher market volatility – like now! – when a person is under more pressure or when a major life event takes place.
DNA Behavior’s Market Mood
For the first time, advisors can predict the Market Mood of clients in times of volatility and have at their fingertips the customized communication keys and instructions for proactively taking action.
I suggest that when a persons financial well-being is under threat, they may well have a different reaction and, metaphorically speaking, rush to put on a mask to protect themselves.