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Financial Behavioral Wellness Catalyst

In this identity conversation, Hugh Massie sits down withTed McLyman. Founder and CEO of MyApexx Behavioral Solutions Group, Ted is an author, entrepreneur ironman triathlete, and passionate about human behavior.

Ted believes that the traditional rational approach to financial literacy and financial planning is wrong. The rational spender concept is a myth, and humans are not hardwired to work well with money. He developed the  Money Behavior System™ to help educate consumers on adopting better financial practices.

Click below to watch the full interview.

Financial DNA Empowering Female Voices

Earlier this year, I sat down with Danny Liberatore from The Wealth Enrichment Financial Group to discuss the impact Financial DNA has had on his practice, and how it transformed the way he works with his clients. 

Working with female investors

One of my biggest takeaways from our identity conversation was Danny’s approach in working with female investors. He mentioned that most of his clients are females and that Financial DNA insights have enabled him to foster meaningful relationships with them.

You see, female investors don’t want to be treated any differently than men, however, their communications styles are different. They want to be part of the process. They have a savviness for the intricacies of our work and appreciate the educational part of it all.

Danny Liberatore

Behavioral finance insights particularly come into play in this situation when you are working with male and female partners. Their dynamics unravel from day one, and you need to pay attention to their behaviors in order to understand them better and manage their biases.

Involve both in the conversation

Danny shared with me that most of the time, the women are different from their partners, in terms of behavior and responsiveness. 

It is no secret that the financial service industry has done a very poor job trying to understand women and genuinely helping them. What happens more often than not is that they are being ignored and their opinions are unsolicited or unappreciated. 

As a financial advisor, you need to be able to wear different hats when working with couples. When you make the effort of explaining things differently to your clients and accordingly to their behavioral styles, you get instant breakthroughs. 

Danny mentioned that he’s made it a habit to always address the wife first and disclose to the husband that while he might be addressing him later on separately, he doesn’t want him to feel ignored or unappreciated. He will ensure to bring the husband back into the conversation and keep her engaged.

The truth is, once you honestly explain your process, your clients instantly feel included. It not only puts them at ease, but it builds trust. And we all know that trust is a fundamental factor in advisor/client relationships. 

This is a common situation for FI’s to find themselves in. When the female is not the breadwinner or the creator of the wealth, you’ve got to make her even more involved, without leaving the male out either.

How it usually starts 

When meeting with a potential client for the first time, pay very close attention to the couple dynamics as they unravel before you. It is common for men to take on the lead role in a conversation with their advisor, especially at the beginning. 

However, if it gets to the point where the female’s opinion is not taken into consideration or is not solicited at all in the planning process, that should be a red flag for you. You need to make the effort to always keep them engaged and involve them in the conversation.

You can also look at it from a business perspective. Let’s say you are taking on this new client that has great assets and potential for revenue growth. If you strictly focus on working with the husband, when life happens and you find yourself in an intergenerational wealth transfer situation, what are your chances to still be the financial advisor for that family? 

Final thoughts..

When working with your clients, it might feel normal to engage the one partner that takes on the role of leader and simply overlook the other. The risk you are running there is to not only alienate one of the decision makers but also falling victim to your own status quo biases. Pay attention to your client’s dynamics, keep both of them engaged, and build what could potentially be a lifetime working relationship.

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.

Getting In The Way Of Our Own Financial Success

Getting In The Way Of Our Own Financial Success

This article first appeared on Nasdaq.

If we are to be effective in the decisions we make, we need to understand our uniqueness, our talent, our individual behavior and our personality. Without this insight, we are unlikely to make rational, wealth-growing financial decisions.

What gets in the way of our own success? Lack of self-awareness? Do we have a bias we are unaware of? Perhaps it’s because we do not know how or why we make the decisions we do. Or maybe it’s because we have no life plan or direction in life.

That’s what we call getting in the way of our own successes, whether financial or in life in general. So, expecting financial advisors to know how to advise us is a big ask. We are all unique, even though some of us might share similarities, we are all different in terms of how we respond to situations and make financial decisions.

Add to the mix a partner, and unless we and they devote time in to understanding each other’s communication, behavioral and decision-making approach, we simply have more confusion. More to decipher. I might add that the partnership dynamic is often a significant problem for financial advisors to navigate. Examples:

  • One party is results-focused; the other relationship-focused.
  • One wants the pension fund; the other the big house.
  • One wants to research and make the financial investment decisions without an advisor. The other needs guidance from an expert.
  • One is trusting and will go with whatever the advisor says. The other is skeptical and questioning and challenges everything they say.
  • One is comfortable taking risk; the other cautious and conservative.

Still, we often put our financial decisions in the hands of advisors who have absolutely no understanding of how to manage these our differences. Therefore, we make dumb decisions and get in the way of our own success. Not only that, if we make no attempt to be behaviorally self-aware, we will keep making the same dumb decisions and failing at our own financial success. I believe we make those dumb decisions because:

  • We lack self-worth.
  • We lack confidence.
  • We are too easily persuaded.
  • We are not growing in terms of understanding our behavior.
  • We don’t understand how to buy time out to consider our response to decision making.

Or perhaps we simply fail to consider the why of what we are doing. Why:

  • Am allowing other people to make financial decisions for me?
  • Have I not considered the significance of delegating these life decisions?
  • Is it that I’m accepting the decisions others are making about my life and circumstances?
  • Aren’t I making these decisions for myself?

Taking a step to gain insight into our inherent talents and behaviors ensures we are well equipped to understand how we make decisions. What should our life goals be? How and when and who to entrust with advising us? There are many quality behavioral data gathering processes that can be used. Be behaviorally smart and make sure you the advisor know yourself and, in turn, help your clients complete this discovery process. This will put you both on the same page. Your clients have a lot at stake and will appreciate the small investment of time it takes for you and them to best know how to help them. The vast majority of clients will find it at least enlightening and often fun.

Why not begin right now – try our complimentary DNA Behavior Natural Discovery here.

Chip powering ideas

Are You a Consultant? Seven Keys That Will Set You Apart From Competitors

When a consultant is engaged to resolve a business challenge, invariably they begin the process with a meeting to uncover the issues.

One huge pain point for consultants is getting to the bottom of specific problems. Being able to analyze what is being said about the issues to deliver solutions can be tricky. It doesn’t matter what level of the organization is briefing you, care must be taken to apply a behavioral and communication filter to what is being said.

Regardless of the briefing – most skilled consultants would agree that a very large percentage of business challenges is people-related.

As a consultant, this is fertile ground for you. Regardless of your expertise in any given field, being able to analyze behaviors is a key selling point. A unique point of differentiation that actually pays dividends. From the C-suite to the front line – all behaviors and communication styles should be known.

Since 2001, DNA Behavior has used validated behavioral insights to guide businesses building a stronger people culture. The Natural Discovery process reveals practical information on how best to manage behavioral differences. By delivering customized experiences for management, their employees and customers, you will be positioned to resolve wide-ranging challenges your clients might be facing.

2002 Harvard Research shows 87% of business issues are communication-related – caused by human behavioral differences.

If coaches, management consultants and others are to provide companies with solutions they need to dig below the surface, they’re going to need ways to find out individual behaviors, including whether, or not, people are emotionally invested in the company.

So, getting below the surface of the people is critical:

At DNA Behavior International we have recognized over the past 20 years the importance of understanding #PeopleBeforeNumbers.

Using scientifically based data gathering, we know that even the most difficult of business issues are rooted in individual behaviors. Not surprisingly, many CEOs find people issues a challenge. They feel, quite rightly, that dealing with the people takes their mind off the strategy and direction of the business. And, the day-to-day pressure of business can surface many challenges, not because of incompetency, necessarily, but because the norm has become mundane and people behave differently when bored or unfulfilled.

Consultants are in a highly competitive market place. There is plenty of work available for quality consultancies and this means there is significantly higher competitiveness. Again, you need a point of differentiation and DNA Behavior International can provide you with that unique insight and edge.

DNA Behavior can provide you the consultant with solutions that bring a fresh perspective and a breadth of experience to companies you work with.

Why not take 10 minutes to complete your own DNA Behavior Natural Discovery. Whatever you offer in the way of consulting – we partner with you to enhance the people part. Sounds too good to be true? Why not try it? Complimentary, on us. You’ll appreciate the difference and so will your clients.

COMPLETE BDNA DISCOVERY

Consultancies exist in many shapes and sizes. Whether you give strategic advice, solve crises, help increase efficiency or provide other solutions, when you can reveal individual behaviors and talents your service offering increases exponentially, enabling you to provide more focused and more quantifiable perspectives and solutions.

DNA Behavior can work with you to differentiate yourself:

  1. We offer scientifically-based Natural Discovery tools that enable you to know, engage and grow your clients and their staff at a deep level.
  2. We train you to interpret and use the Business DNA Natural Behavior Discovery Reports to improve Personal Talent, Hiring and Team Performance. And, to make that first meeting pitching your work more impactful.
  3. We deliver tools and insights enabling you to work with clients to improve the Hiring Process and Conduct Behavioral Interviews.
  4. Working with groups – got that covered. You will be able to build team performance through a greater understanding of personal and team member motivations.
  5. You will know how to work with leaders to interpret and use the Business DNA Leadership Performance Report and guide a leader to build a Leadership Performance Plan.
  6. You get access to Communication DNA Discovery Reports to increase the emotional engagement of employees and customers for relationship performance.
  7. You will be able to offer services to Diagnose Business Engagement Strengths and Struggles through Behavioral Insights for improving Business Planning.

Here’s a personal invitation from our CEO/Founder to partner with us to build your business.

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