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Clients Want Behaviorally Smart Advisors

Why should an advisor become behaviorally smart?

  1. Prospects and clients are looking for it.
  2. 93.6% of financial planning is the behavioral management of the client.

Recent research reveals:

  1. Pre-retirees say an advisor whom I trust and who really gets me would have the most positive impact on their financial outlook.
  2. Nearly half of the men and women surveyed do not feel they have enough financial knowledge to feel confident about making investment decisions.

You need to get your clients and you need to educate them in a way that makes most sense to their own unique financial personality.

The need to objectively uncover natural instinctive behavior is crucial in the financial planning process because this is how clients:

  • More comfortably make decisions
  • Operate under stress
  • Create a framework for life and financial perspectives

Understanding people before numbers is more important than ever.? Your client relationships depend on behavioral awareness.? Its a trend that never really went out of style.



Peggy Mengel ? Vice President, Human Behavior Solutions Advisor at DNA Behavior

Specializing in financial services, Peggy uses behavioral intelligence to help businesses navigate human differences to unlock performance potential. DNA Behavior helps grow behaviorally smart businesses and financial advisors worldwide to increase competitive advantage using the most reliable behavioral discovery and performance development systems on cutting-edge technology platforms.

Visit the Financial DNA website to learn more about building client engagement in the financial planning process.

Why should an advisor become behaviorally smart?

1. Prospects and clients are looking for it.

2. 93.6% of financial planning is the behavioral management of the client.

Recent research http://www.fa-mag.com/news/a-trusted-advisor-leads-to-positive-financial-outlook–survey-finds-15957.html?section=131 reveals:

1. Pre-retirees say an advisor whom I trust and who really gets me would have the most positive impact on their financial outlook.

2. Nearly half of the men and women surveyed do not feel they have enough financial knowledge to feel confident about making investment decisions.

You need to get your clients and you need to educate them in a way that makes most sense to their own unique financial personality.

The need to objectively uncover natural instinctive behavior is crucial in the financial planning process because this is how clients:

? More comfortably make decisions

? Operate under stress

? Create a framework for life and financial perspectives

Understanding people before numbers is more important than ever. Your client relationships depend on behavioral awareness. Its a trend that never really went out of style.

Manage How You Behave When Under Pressure

Our research shows that when people are under pressure they will tend to revert to their more natural instinctive state. That is their natural DNA behaviors are more likely to take over. In the heat of the moment these behaviors may cause us to not act in a common sense way regardless of what we have learned, experienced before or generally what wisdom would suggest is the best choice.

Often people will revert to their natural behavior when they have gone through a very emotional event ? such as a divorce, business failure or been rejected in some way. It can also happen when something very positive happens like receiving a financial windfall, inheritance, or a business sale etc.

I just read some interesting research in the following Psychology Today article that highlights this point around how people may take higher risks when they have been rejected or gone through a negative emotional event – click here to read the article.

Of course, enhanced behavioral awareness can help you to manage how you will react but even then not always because we all have natural blind-spots.

Visit the Financial DNA website to learn more about our solutions for financial services and get started on your path to becoming a behaviorally smart advisor.

3 Ways to Prepare for the Behavioral Awareness Movement

More financial services firms are starting to join the behavioral awareness movement.? Why?

Behavioral theories now have proven hard-edged results. By engaging clients on their terms, financial services firms can increase revenues and manage their compliance risks.

behavioral finance, behavioral awarenessWhat can you DO to help your advisors become behaviorally smart?

1. Give your advisors bigger behavioral data

93.6% of financial planning is behavioral management of the client. As described in What Drives Your Financial Decisions, an advisor needs to know deeper traits of the client such as personality style, emotions, listening style, communication preferences, confidence level and desire to control.? And, this behavioral data needs to be at the fingertips (via CRM) of the advisor and their staff.

2. Provide a client engagement solution for your advisors

In a recent survey by Practical Perspectives, one of the top topics of interest to advisors is client development and engagement.? Advisors are not interested only in theory.? What they really want is a program that is actionable and implementation-oriented.

3. Lead by example with your advisors

Does every employee that interacts with your clients know their communication preferences and behavioral style?? Research shows a 40% decrease in repeat calls when a call center rep tailored their response to match the unique personality of the caller (client).

Isnt it time to recognize individual differences and become behaviorally smart?

Discover the action steps to take now at www.financialdna.com.

How it Works, DNA Behavior, behavioral consulting, psychometric testing

Uncovering the Advisory Blind Spot

Dictionary meaning: blind spot a subject that you do not understand well, often because you do not want to know or admit the truth about it.

Most clients have a blind spot when it comes to financial management; but equally most advisors have a blind spot about who their clients are. The advisor often believes he or she can read people but it is natural the advisor will not be able to get a complete and objective understanding of the client regardless of their intuition or level of experience. Uncovering these blind spots has two powerful outcomes in the financial advisory process.

Advisory Blind Spots, Behavioral Finance, Financial PersonalityFirstly, for an advisor it increases their understanding of the importance of asking clients the right questions. Getting to know how clients are financially wired is a key to building relationships. Secondly, it uncovers the need for advisors to acquire skills that assist them to understand different client communication styles and how to use that knowledge to moderate/adjust communication styles to draw out information about clients financial behavior and decision making patterns, and from there adapt advice to better meet their needs.

The challenge for clients is that they dont know what they dont know and this leads to blind spots. They may well not be able to see opportunities in risk nor risk in opportunities, and advisors need to be able to expose these blind spots and the possible history behind them. Being able to discover their future plans, their aspirations, their background and what has driven or influenced where they want to go in terms of wealth management ensures that advisors give targeted advice that will undoubtedly build stronger client/advisor relationships.

Sarah and Michael recently engaged to be married decided to speak to a financial advisor about planning their financial future. The advisor encouraged them to save and invest; to work towards owning their own property and gave them reading material to support the advice.

Sarah and Michael left confused and dissatisfied. They had wanted to talk about handling money responsibly; they wanted to ask questions about separate or joint accounts; they wanted to start a college fund for the future education of their hoped for children; they wanted to avoid debt but use and manage credit sensibly; they wanted to ask about a self-managed pension scheme; they wanted to share their dreams for the future and how they could build wealth to enable them to realize them.

Did the advisor give advice? Yes. Did the advisor uncover anything significant about these two potential clients? No. Had time been invested into asking questions, discovering their financial personality style uncovering their history, revealing any blind spots ? the advisor would have discovered that Sarahs parents divorced after mismanagement of finances that led to bankruptcy and she was determined that this should not happen to her but knew she had many concerns about never taking any risk with finances. Michael came from a long line of financially astute family members. As a family they openly discussed finances and understood the importance of encouraging the younger members to do likewise.? Michaels family through careful management had built up a significant wealth.

http://www.communicationdna.com/newsite/wp-content/uploads/2012/04/cdna-solutions-slide-enterprise1-130x60.pngHad the advisor been behaviorally smart; had they objectively known the different behavioral styles and emotions of these clients which comes from using a formal behavioural discovery process; had the advisor been equipped to navigate human differences by discovering and aligning how to uncover different communication styles, behaviors, solution preferences and blind spots this story would have had a happier ending. As it was Sarah and Michael took their business elsewhere.

To learn more about uncovering the advisory blind spot, please visit the Financial DNA website.


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What Do Clients Want From Their Advisor?

Often we think that clients want higher investment returns from their advisor, and therefore that defines the role of the advisor. However, research shows that clients want a relationship. This has actually been the case for a long time but the research is becoming clearly stronger all over the world in the need for advisors to develop stronger interpersonal skills and emotional intelligence.

What Clients Want from AdvisorsRecent Trusted Advisor Research by Professional Planner magazine in Australia demonstrates that an advisors interpersonal skills and emotional intelligence are most important by 82% of the survey participants who were clients of Advisors of the Year.

Refer to the full article at: http://www.professionalplanner.com.au/research/afa-study-shows-eq-pays

There is no doubt developing your interpersonal skills grows the bottom line. In advisory business relationships are the key to revenue sustainability.

Many advisors are naturally results orientated in behavioral style and therefore naturally lower on relationships. But, the interpersonal skills can be learned with sustained effort, focus and investment. The starting point is behavioral awareness.

So, the question becomes why isnt there more sustained investment in developing the interpersonal skills and EQ of advisors? It seems there is still a strong over weighting towards technical training. When we see this change, trust in the industry will grow.

Our firm has recently been working with Advisors Ahead to deliver this type of training to financial planning students and young advisors. This is an important starting point but needs to go much further.

To learn more about how you can grow to become a behaviorally smart advisor, please visit the Financial DNA website.