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Genuine Identity and Purpose: The Money Will Flow

– First Published on Nasdaq –

How does knowing your identity impact how you relate to other people? What part does it play in boosting confidence? Throw the emotional and gravitational pull of money into the mix, and where does knowing or not knowing your identity fit?

There is no doubt that understanding your identity reflects who you are at the core. It informs the direction of your life. It highlights the importance of your communication style, whether professional or personal.

Here, we speak of identity as your inherent or innate passion and purpose and the associated behaviors, good or bad.

People, then numbers

It may go without saying that we are all different and being able to manage differences enriches relationships. That can be particularly impactful in the financial services industry, where the emotional pull of money is front and center.

In fact, understanding the identity of clients is foundational to the advisory process. The same is true of advisors knowing their own identity. On a day-to-day basis, advisors need to be able to adapt their own communication to those of others. For example, they need to know when to be direct, inclusive, soft, a listener, or a counselor.

When knowing identity focuses on the advisor-client relationship, walls come down, creating a much healthier framework for delivering advice. Advice that is likely to be more accurate and lasting. Clients know when an advisor genuinely knows them and cares about their life goals, plans, and wealth creation. They know when advice is more about people than numbers.

Money decisions are different

I’m passionate about pioneering the understanding of money behavior. We of course all have innate behaviors and understanding those behaviors – especially as pertains to decision making – is particularly challenging but also particularly revealing when it comes to money.

Money impacts every aspect of our lives. Money can power our lives positively or negatively, regardless of the amount of money we have.

But what I’ve confirmed over the past few years is that when individuals know their identity, they can put money to work for them positively. As a result, they tend to make fewer decisions – about money and finances but also about other things – that impact them negatively.

When you know your identity, you know your talents, and you know your inherent behaviors, leading to wealth creation via applying your skills and building meaningful, supportive relationships. Whether you are an individual investor or leading a team or organization, it’s essential to understand the energy of money and people’s relationship to it.

Identity as info & armor

We live in a world that is highly dynamic and interconnected. Whether the speed at which we all work, the many ways technology has shaped what we do, or the deluge of opportunities coming at us, we need to be able to flex. To adapt at a moment’s notice.

So, if identity is what shapes and protects us, we understand who we are and our inherent reactions, and we can flex and adapt securely. We are less likely to make bad decisions. Instead, we see opportunities for what they are and choose whether to grab them or walk away.

A cautionary note for advisors and industry leaders is that the environment changes regularly inside a business and in people’s lives. Unless identity is known, you have no way of anticipating how clients will respond to life challenges. In reality, you are advising and leading the (figuratively) blind.

As an advisor, knowing your own identity is transformative. It increases and clarifies the quality of the questions you ask your clients, the observations you make, and the guidance you provide them – including how and when you communicate with them. You know the importance of getting to foundational stuff that means the advice you give or leadership style you adopt is suitable for that individual in that scenario at that time.

The clarity of identity

Whatever your life circumstances are, discovering a robust identity and then living it is the pathway to accelerating your advancement. There are no magic bullets here. There is work and focus involved.

Once you get the clarity of your identity, your confidence will dramatically increase. Confidence is the Number One influencer of performance. The journey will be highly positive, and through it, you will be a better person, at work and at play. And, as an advisor, you will have a better business.

It’s true for both advisors and clients: Genuinely live your identity and your purpose, and the money will follow.

See Hugh’s other writings for Nasdaq here.

Stop Trying to Delight Your Investors

In the world of financial advice, many clients think they know themselves and their money better than they do and certainly better than the advisor does. How does this thought impact the role of a financial advisor? If you know nothing about behaviors then clients with this ‘know it all’ attitude will be difficult to advise and manage.

Most successful financial advisors invest in understanding client behaviors. They ensure they have the insight and tools to be able to understand how people think, make decisions, and want to be communicated with. As a first step getting to understand how to speak with clients is important. DNA Behavior Discovery provides in-depth insight into the way people communicate and how they wish to be spoken to.

It takes just a few minutes to complete a discovery. The outcomes prepare the way to start the advisor/client conversation.

Why Getting to The Root of Behaviors Is Key to Addressing Them Head-On?

So, what to do? One important key is to know yourself. There is little point trying to manage a tricky client if you allow them to push your behavioral buttons.

So, first step, get to know your own financial personality and communication style. Remember, as an advisor, there will be many conversations with clients where you need to understand the importance of managing the behavioral differences between you and your client and how to navigate any bias either you or your client might have. Comprehensive self-knowledge will inform ways to flex in order to keep the conversation going.

The wide-ranging DNA Behavior Natural Discovery process takes just 10 minutes to complete, can be delivered in real-time to any of your devices, and delivers 200 insights, 64 behavioral factors leading to 1 unique style (your client).

Successful financial advisory practices don’t get involved with a ‘one size fits all approach’. They know the importance of delivering accurate advice that reflects the needs of the individual. To satisfy the ‘know your clients rule’ advisors must be able to manage the behaviors of their clients on an individual basis.

The Behaviorally Smart Organization

As businesses emerge from the global pandemic self-isolation/remote working season, many will be looking at ways to increase their business flow and maintain their existing clients. Advisors will have relied solely on online platforms to stay connected. Clients who might not have previously considered working with their advisor using online tools could well be open to this new approach. Organizations wishing to demonstrate their understanding of the behaviors of their clients will be looking to data collection, online platforms, social media, and other tools to collaborate with their clients, build their business and improve their service offerings. One such way is to use DNA Behavior to work with your entire organization to match advisors to clients. What better service offering can there be than one that has such a deep understanding of their advisors and clients’ financial and communication personalities and is able to deliver a customized behaviorally smart matching approach to their advisory business?

Moving the Needle to Build Advisor/Client Relationships

DNA Behavior will work with your entire organization NOW to prepare you to build an enhanced service offering post coronavirus. It’s time to take a fresh look at how this virtual working has offered solutions to improve service offerings. Going back to the same old same old just won’t cut it. Clients want something different as do advisors. Now’s the time to take a deep dive into understanding the personalities of the people that make up your business. Whether an advisor or client. Whether receptionist, the board, or the C suite, we will set you up to face the ‘new world’ by using our extensive tools to improve your bottom line.

BeFi API is A Must for Broker-Dealers

A robust Behavioral Finance platform will enable Broker-Dealers to meet the fast-growing need for mega-customization. Such a platform will not only provide insights into how clients invest but also reveal habits to how Broker-Dealer employees and investors spend, set goals, communicate, work, live, and make decisions. These insights become transformative when powering core Broker-Dealer workflows such as:

• Advisor-client matching programs (which advisor is suited for which client)

• Optimizing marketing spend (who wants steak dinners vs. Super Bowl tickets)

• Sending customized behavioral driven marketing content to clients

• Developing customized onboarding playbooks

• Arming advisors with the perfect behaviorally generated scripts to deliver at the right time

• Predicting fearful and opportunistic clients on a real-time basis with Market Mood™

To learn more, download our E-Book.

Behavioral Science: Don’t Just Survive – Thrive

Behavioral Science: Don’t Just Survive – Thrive

This article first appeared in Nasdaq.

Where does Behavioral Science fit in business? This is a question I am increasingly asked by financial leaders.

They can see how behavioral science, nudging and behavioral economics have become significant topics, yet cannot always see the “fit.” More importantly, they want to better understand the advantages. (And, no doubt, the investment.)

Simple answer? If understanding human behavior is foundational to your business, you’ll greatly benefit from BeSci. The type of industry you lead is less important than the business need to understand your people and customers.

Insight as an edge

I get to see firsthand how the application of behavioral science data in any business has profoundly changed the way leaders, advisors, policy makers and practitioners increase productivity. And market share.

One such area of business is financial advice (natch). When advisors have tools at their fingertips to deliver validated insight into the client behavior experience, they are able to intervene to steer clients away from poor life decisions in this time of pandemic-nervous market volatility.

The financial industry still has much to do to satisfy Know-Your-Client regulations and provide a quality customer experience. Those goals are even more challenging during this market. But behavioral insights enable financial advisors to manage investor behaviors remotely.

The entire advisor-client experience has shifted in ways unimaginable a few months ago: No face-to-face meetings, relying on social media platforms, clients and advisors stressed, and behaviors surfacing that lead to bad (financial) decisions.

Consider that advisors who previously invested in BeSci solutions are not only managing through these tough times; many are building their business, as the leverage chaos into opportunities. Especially in challenging times, advisors find themselves major client influencers. More coach than just advisor. That’s only possible when advisors understand clients’ financial personalities.

Learning from the past

The financial crisis of 2008 heightened the awareness that rational behavior was not a realistic assumption to make in times of market crisis. Wise advisors recognize that, without a depth of insight into client behaviors, they cannot hope to keep clients on track.

Behavioral science has burgeoned since 2008. It’s relatively simple – employ a quality data gathering behavioral tool to understand clients. It’s also not expensive and the results far outweigh the investment. And the productivity and success pendulum quickly swings upward upon implementation.

Power your platform with BeSci

Remembering that each is 100% unique and delivering the corresponding customized service is nearly impossible, even if your advisory practice is relatively small. There is no one-size-fits-all approach that will work across the board.

But if you can find a behavioral science tool that is enable by an application programming interface (API), it allows you to leverage in BeSci to existing systems, platforms and methods, so you are improving your proverbial wheels, not reinventing them.

A proven behavioral science API enables your team to quickly integrate to humanize your platforms with rich, scientifically validated, personality driven insights to add a human touch to your digital solution giving access to hundreds of behavioral insights.

Whether you are looking to match clients to advisors, customize and personalize an experience or ensure a good fit for a team or role, access to this level of behavioral insight can help you succeed. Leverage and customize the experience across entire organizations from client-facing engagements, marketing, planning and investing and compliance.

Clients will feel, see the difference

Putting behavioral science knowledge to use demonstrates to clients that the advisor is keenly interested in their unique wants, needs, goals and challenges. In this way, BeSci has the follow-on benefit of signaling that the advisor values and invests in long-term client relationships – and the robust outcomes that follow.

Would Your Clients Recommend You to a Friend?

Would Your Clients Recommend You to a Friend?

This article first appeared on Nasdaq.

I wonder how many advisors ask their clients some version of, Would you recommend me to your friends?

The advisor-client relationship is a personal one. After all, talking about your money is about as personal as you can get. Why then are advisor organizations still using various forms of gifting to attract more clients, rather than fostering highly engaged clients? (Which I would posit is the best way to attract additional business – by advisors having tailored, meaningful conversations with existing clients.)

Advisor style, client style

To really appreciate the role advisors have in asking the question – would you recommend us to a friend? – it’s important to know the style of each advisor and their client to understand the different behaviors of each at a deeper level. If advisors do not have any understanding of behavioral differences, they will not be able to connect with clients sufficiently (deeply) enough to be able to broach this question.

Every time an advisor meets with their client, the conversations they have, the advice given and the stories they exchange should all lead to the final exchange – would you recommend me/us to a friend? Whether they actually make a referral is only part of the equation; one thing you are really asking is, Are they happy, well-served and do any adjustments need to be made to your relationship?

The outgoing, engaging, conversationalist client will more likely recommend, without being asked, if the service is good and if the exchange was both helpful and fun. They also will be the first to say negative things when the service is not right.

The more reserved, quiet client who is contented with the service they are receiving may well recommend you to close friends without being prompted to do so. And they likely would not actively share negative experiences they have had with their advisor with others unless prompted to do so.

People are different. Each has their own unique personality. Trying to attract new business with a one-size-fits-all approach will never work. Again, the key is to invest in understanding individual behaviors at a deeper level, then using this insight to bridge the gap to manage the differences. Also, technology solutions can be deployed to help manage the customization of the different behavioral experiences required.

So, what’s getting in the way of this approach? Clearly much depends on the individual behaviors of both the advisors and the clients.

Think ahead

The next generation of investors will have little or no experience of face-to-face connection. They will rely on technology to do business. To receive the customized and compliant service they want from a provider will be determined not just through the outcomes of successful advice, but even more importantly, through understanding the behaviors of their advisors and how closely the different personality styles align.

Next-gen clients will:

  • Expect you to get to know them;
  • Want you to understand their life goals;
  • Demand that advice lines up with the grand plans they have for their future; and
  • Expect or even require you to advise and counsel them on how to take appropriate steps to achieve their goals.

(Hint: Get ahead of the game by meeting these needs now, and not waiting for the next generation to tell you what they want.)

Balance traditional and tech

For many, the personal touch will always best the remote tech solution. But it is not for everyone all the time through the client life cycle. Getting the balance right by understanding behavioral differences and managing them is where relationship success sits. Yes, the introduction of technology can be seen as a negative disrupter, but it isn’t.

Building a strong connection with clients based on understanding their behavior will reveal those who explicitly want a face-to-face interaction, and those who prefer a digital solution (at least to some degree). Knowing how to manage these differences and different expectations is where meaningful conversations can be developed.

Once a relationship is built, connection can be maintained via any media. Reliance on technology to stay connected with family and friends and keep each other up to date with happenings is now the norm. Why wouldn’t the advisor-client relationship more heavily invest in the use of technology, as it also enables scaling customized experiences for each client?

Interestingly many observers of the financial services industry cite technology as the “rogue,” yet if a personal relationship is what is required, where better to forge these relationships than through the smarter use of technology?

Grow and win

When advisors invest in knowing how to deal with different behavioral styles, the first question after the initial face-to-face client meeting with a client should not be – would you recommend us? – but, Would it be good to stay in touch more regularly online?

Consider leveraging digital technology solutions while making sure that offline communication with clients is not ruled out completely. Not all advisors or clients will be comfortable with this. But if you have no understanding of behavioral styles, you will never know who to target with this 2020 approach to delivering financial advice, which can build deep relationships to grow the business.

So, if you want to build business through clients referring you, first build a behaviourally smart financial planning process, and then add on or adapt tech solutions to enable a customized behavioral experience for every client. Of course, through greater behavioral understanding you will know the more outgoing clients in your portfolio who will be comfortable to step out in the world to recommend you.

It just may be that technology will also provide a way for more of the naturally reserved clients to make referrals as well. Forget investing in “nice to haves” and “consumables” – products – to attract new clients and build referrals. Start investing in understanding human behavior and how it can be practically applied – for your benefit and for the benefit of your clients. A win-win.

It’s in this atmosphere of genuine connectivity that an advisor’s services can grow, both in depth and reach.

How to Become a Behaviorally Smart Advisor

How to Become a Behaviorally Smart Advisor

The financial services industry needs new business models ones that help re-define what a financial advisor is capable of beyond just a numbers oriented investment orientation. The traditional twenty-five year + model of providing investment access and selection is being disrupted by technology and new players coming from other industries. The friction from this evolving operating environment seems to be leading to exploring more holistic and new client-focused experiences that create more engagement and deeper connections.

The Institute for Innovation Development, to explore this further, recently talked with Leon Morales, Managing Director of DNA Behavior International a behavioral finance technology platform designed for financial advisors to Know, Engage and Grow their relationships with their clients and prospects. We discussed the evolving nature and changing value proposition of financial advisors into this more holistic model with advisors serving as client behavioral coaches and mentors.

Hortz: You have frequently quoted from the Spring 2000 Journal of Investing article that states 93.6% of the financial planning process is the behavioral management of clients. We have always understood that being an advisor is, bottom-line, a relationship business but, what does that number tell us about the true nature of the financial advisor role

Morales: All the studies and resulting data that have looked at the issue appear to agree, that client behavioral management is one of, if not the, most important function of financial advisors. Understanding the clients communication style, personality, emotions and fears, these need to be mastered and managed by the advisor. Learning practical ways to understand the individuality of clients, how they make decisions and what triggers their emotions, are key to being able to guide the client over the longer term successfully, coaching them to truly achieve financial goals. What this points to is the ultimate importance of advisors being behavioral managers as much as they are technical managers of investments.

Hortz:What do you recommend as the key steps advisors must take to start strengthening their behavioral IQ and behavioral management skills with clients?

Morales: The most important step required for moving from the traditional financial advisor role to that of a Wealth Mentor is to learn first how to ask much better questions of the client. This enhanced discussion builds greater client relationships and opens the dialogue to reveal core behaviors, biases, reactions under pressure and other issues. Part of our Certified Wealth Mentor program’s takeaways is a list of many key conversation opener questions, used for client meetings. Further, the questions will encourage the clients to probe their own thinking. The advisor then gains insight into how the client makes decisions, the client’s reaction to taking a new direction, or confirmation they are on the right path.

Together with insights from our behavioral reports, this enables the advisor to identify points of alignment between what’s stated in the report, versus what clients are saying. This comparison enables the advisor to zero in on the clients areas of strengths and struggles and narrows down the tension between processes and behaviors that might get in the way of delivering outcomes. This kind of client connection, using our very concrete system, builds long term advisor/client relationships and advisors will know how to manage client bias and reaction under pressure.

Hortz: What are some predictable insights you can discover about your clients

Morales: Our DNA Discovery process delivers insights in several key areas:

  • Communication- -enables advisors to connect and work with the client on their terms
  • Biases – – awareness of assumptions or mental habits that need managing
  • Spending patterns –uncovers money habits that may impact investment strategies and outcomes
  • Risk tolerance and reaction to market movement- provides detailed behavioral insight into the client’s natural risk tolerance and risk propensity

Hortz: Can you walk us through your claim that a behavioral approach, using your wealth management platform, results in 99.5% client solution suitability and additional client value

Morales: The use of the Financial DNA behavioral approach enables the advisor to more deeply engage with their clients. Asking the right questions, and having a robust discovery process that more rigorously breaks down all the elements that make up risk, to a much tighter client discussion, reveals how much risk really needs to be taken, how much risk could financially be taken, and blending learned behavior and natural behavior to cover the right level of risk. Behaviorally smart advisors -who manage these conversations with the client well – will get a much higher level of suitability in what they recommend and what gets deployed or purchased in the end.

Dalbar research shows that 7.45% a year is the potential loss because of investors not having an advisor and making poor decisions. There is safety for clients in having a behaviorally smart wealth mentor manage their portfolio, rather than trading their own accounts. This goes back to the risk profiling where we believe we can get to 99.5% clients solution suitability. Therefore, 91% reflects accuracy from the DNA Natural Behavior Discovery and the other 8.5% comes from the learned behavior discovery.

Hortz: Do you see an evolution in what a financial advisor’s core job is and how they will be perceived in the future?

Morales: Yes. I believe that the advisor needs to become a guide for life for the client and to be able to navigate all the issues clients might face. When the client sees the advisor as their go to person for help with decisions, a trusted collaborator, that not only impacts their financial and investment world, but also life decisions and choices, all of which are foundational and have financial consequences. This kind of advisor-client relationship opens wider conversations regarding family dynamics. Advisors need to be the family advisor, and that’s going to be a big area for them in the future. To do that, they need to broaden their skills to handle a wider range of areas, or at least be able to communicate about them.

Importantly, a core adjustment required is the change from client meetings to client conversations. The word conversation makes the advisor/client engagement process easier, less formal, more likely to deliver open discussions. This adjustment is the process we have been bringing in to some of the firms we have worked with recently.

Hortz: How do you help advisors change their habits and ways of doing business to help them evolve into this new advisor business model

Morales: While education and our Certified Wealth Mentor Program are an important part of the process, a key strategy for DNA Behavior International, in order to help advisors make this happen, is to embrace our role as a behavioral Fintech company. We can now take our behavioral tools, processes and knowledge and embed that into their practices through an easy, accessible, online behavioral platform which provides them with practical and scalable behavioral intelligence across every client and firm employee. They would have readily available behavioral awareness, using our built-in discovery processes, and real-time behavioral management capabilities using our apps. Behavioral management can now be infused into the DNA of the firm.

Hortz: Tell us a little about your steadily growing list of strategic partners (BrilliantFIT, AMP) and how you work with them in extending your behavioral platform and resources to equally support advisors, clients, and other key financial services vendor firms

Morales: We have a wide range of technology integration able to be deployed, not just in the financial services arena, but across many disciplines and industries. With Financial DNA, we are a leader in the deployment of personality and behavioral based tools, but we also have such relationships as our hiring partner Brilliant Fit, based in Melbourne, Australia. They are making inroads by integrating behavioral discovery to the filtering of candidates for management roles and ongoing career development.

We built an alignment with Salesforce, so DNA insights are on the Salesforce platform. We are also currently working with firms on matching advisors to clients based on personality styles. We work with big data to open a significant access to leads by building algorithms to be able to link that data to personalities. We are working with a range of financial planning software groups globally using our behavioral chip strategy to power the behavioral management of the client experience.

Hortz: From your perspective in building to and working with a wide cross-section of financial advisors, what is your best advice for advisors in how to navigate this changing business environment in which they are now operating?

Morales: From my perspective, the first key point would be for advisors to develop their emotional intelligence (EQ). Personal development will make them more effective advisors as they interact with a wider range of clients. Maturing professionally in this way will make them a better advisor in guiding others through life challenges again, an expansion of their roles beyond financial guidance. This approach is what will lead to sustainability of the relationship.

Also vitally important are building more processes inside their businesses, particularly around technology, to enable a customized experience to be delivered. Introducing good technology releases advisors to build business and identify gaps where they need to hire and develop good teams.

A further key area is looking at existing revenue models. The current approach needs to be reviewed considering the changing role of advisors with the ability of advisors to become behavioral coaches to their clients. Knowing the importance of behavioral management, advisors can use these behavioral insights to look at how they make their money.

Delivering goals-based financial planning means advisors need to look at how they bring in a retainer fee for working with the clients on an ongoing basis. The new revenue model needs to reflect: running the annual meetings, helping the clients work out their goals, navigating difficult decision-making situations and transitions. Price points can be reviewed, as they add value through mentoring- coaching clients on how to manage their behaviors towards their goals.

Ill leave advisors with one of the favorite quotes of our founder, Hugh Massie: Strict rationality kills culture and relationships, and unmanaged emotions destroy wealth. Financial advisors will be well served to be able to deeply engage and reconcile client thinking and behavior with that clients life and wealth goals.

Written by Bill Hortz, Founder & Dean, Institute for Innovation Development

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors – Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). For more information click here .

3 Keys to Get You Ahead of Your Competitors

Do you feel as though you are always running to catch up?? Here are 3 Keys to get you ahead of your competitors.

financial advisor tools, financial advisor solutions, client engagement tips, financial behavior, behavioral finance, financial personality, client behaviorAdvisors want to deliver excellent advice, they want to see satisfied clients, and they work hard to inform themselves to be able to give this level of service.

Often they are running to catch up with the latest social media, latest gizmo, the latest must read book that remains sitting on the night stand unopened for months, the latest financial industry guru declaring how best advise clients? All very frustrating and unfulfilling but more importantly, unproductive.

So what is the answer to becoming a behaviorally smart advisor?

  • It is all about navigating human differences to match the advisor to the client and provide appropriate solutions for them.
  • It is all about uncovering all of who a person is
  • It is about knowing who your competitors are AND what they have to offer

Some simple thought provokers:

  • Have a conversation with your clients, forget about advising or selling for a short while – just converse
  • Share something of your story, it will be relaxing and itll encourage them to talk. As the advisor, you are the leader: leaders go first
  • Many people often won’t initiate sharing something personal, but are far more likely to do so in response to someone sharing some of their story first
  • Listen for clues, watch for reaction, understanding their needs and values
  • You are now building trust – you are now laying foundations upon which to match a product /advice

3 Keys:

  1. Uncover. Use conversation to build trust by identifying the human behaviors which lead to the differences in your style with the client and within family groups. This will remove the hidden obstacles, and build more confidence in the advice you give.
  2. Navigate. Understand the power of the written, spoken, visual word and make sure the client hears/understands the message.? If you understand your clients communication keys, thats brilliant, but if not focus on the cues provided to you, then you can navigate them through your message/s.
  3. Match. If you are part of a larger group, use this information to match advisor to clients to more easily gain? deeper levels of engagement. If you are in a small practice look for ways you can adapt your approach to match the clients needs.? Add an additional ingredient by ensuring you as the advisor and your client have shared values.? Non-aligned values produce poor results.

For more information on how you can Uncover, Navigate and Match to build sustainable business performance, visit the Financial DNA website.


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