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The Outgoing People Connector

This post is part 4 of our 10 part series on Financial Behavioral Insights from our Financial Performance in the New Behavioral Economy White Paper. The financial behavior insights will help you gain greater self-awareness for recognizing some of your own behavioral tendencies and also those of investors.

Behavioral Insight 4: The Outgoing People Connector

Helen Jones is a 38-year-old mother of 3 children who has a very bubbly, outgoing personality and an active social and community life. Helen openly admits that she has gone to lunch and dinner parties and hears the latest hot tips on what stocks are going up. Often in the excitement of the moment Helen has taken a few bets. She justifies to herself that it will fund a vacation, or this will mean she can have some nicer clothes. However, after a few years of much heavier losses than gains, and the future of her family on the line, Helen realizes something is wrong. Outside help is needed.

Behavioral Insight
Naturally expressive and talkative people will be Engagers who are Outgoing People Connectors. They are able to network with people well but may make uneducated bets from following the herd that sabotage their portfolio.

Communication key: Tell them the names of the people who are involved in the company and management of the investment.

Helen is clearly an Engager with the dominant trait of being an Outgoing People Connector. This means she is constantly networking with others and always exposed to the latest idea or solution.? The Outgoing People Connector will usually be the expressive and talkative type who enjoys mixing with people.

When these networking talents are used well the Engager who is an Outgoing People Connector will learn of some great ideas. The key will be using the ideas wisely. However, often this type of person is quite impressionable regarding what others have to say and will display a herd mentality. We all know that there are people who pick up the latest money-making idea at a dinner party. Everyone else is jumping into a deal; why shouldnt I? Or one of their friends is talking about a hot stock tip.

Further, a struggle for these Engagers who are Outgoing People Connectors is that they are often quite emotionally vulnerable, and they have a desire for instant gratification. So this leads to impulsive decision-making and later regret. While they create the perception of being risk takers, very often they are not. Usually, the quick leap into an investment is matched by a quick leap out with great wealth destruction consequences.

An advisor who is an Engager with the primary trait of being an Outgoing People Connector will be naturally strong at finding out from others what the new opportunities are. However, they need to restrain themselves and only present these opportunities to clients when they have thoroughly researched them. Otherwise, their clients will each have a portfolio with a mix of poor investments.

Learning Point:
The advisor needs to be aware that the Engager who is an Outgoing People Connector will be responding to a lot of up and down emotions with every investment opportunity, and therefore each one needs to be discussed so that wise decisions are made. Ask the client: Tell me who you consult with to get investment ideas? How do you check the opportunities that are presented to you and who is presenting them?

What are your thoughts? For additional information on discovery through behavioral profiles, click here.

The advisor needs to be aware that the Engager who is an Outgoing People Connector will be responding to a lot of up and down emotions with every investment opportunity, and therefore each one needs to be discussed so that wise decisions are made. Ask the client: Tell me who you consult with tNaturally expressive and talkative people will be Engagers who are Outgoing People Connectors. They are able to network with people well but may make uneducated bets from following the herd that sabotage their portfolio.
Communication key: Tell them the names of the people who are involved in the company and management of the investment.
o get investment ideas? How do you check the opportunities that are presented to you and who is presenting them?

The Take-Charge Visionary

This post is part one of our series on Financial Behavioral Insights from our Financial Performance in the New Behavioral Economy White Paper. The financial behavior insights will help you gain greater self-awareness for recognizing some of your own behavioral tendencies and also those of investors.

The Take-Charge Visionary

Behavioral Insight 3, Take charge investors, investor behaviorJack Sun is a 40-year-old driven businessman who has come to meet with you to discuss his finances. You have learned that Jack has just sold one of his businesses and he now has capital to re-invest. You ask Jack the question: What will your life be like in 3, 5 or 20 years? Jack is able to immediately respond that he loves running restaurants and managing people. As the discussion goes on it becomes obvious Jack has worked out his life plan and he will not be retiring. Further, he does not mind what he invests his investment capital in so long as it makes money. He says he is interested in the overall return and not the performance of any particular asset.

Jack is an Initiator with a dominant trait of being a Take-Charge Visionary. This means he is naturally a big-picture thinker. He can see his life out a long way. Being able to more easily get the big-picture clarity does mean he will be naturally more comfortable making long term investment plans. Further, this clarity will help Jack with being able to more confidently make financial choices.

Also, when it comes to managing investments, an Initiator with Take-Charge Visionary traits will be able to more easily look at their investment portfolio in the aggregate. This will generally help them focus on the overall result and not get stuck on looking at whether each particular investment is a winner or loser.

Behavioral Insight
Naturally big-picture thinkers and decisive people will be Initiators who are Take-Charge Visionaries. They know where they are going and will have a consolidated view of their investment portfolio.

Communication key: Keep the discussion high level and provide options on recommendations.

A struggle that an Initiator will have is listening to advice from an advisor because it is about their agenda and plans. This means they could miss learning important information before making a decision and over extend themself.

An advisor who is an Initiator with Take-Charge Visionary traits will be naturally good at giving the client direction but needs to slow it down and listen to what their client has to say. This type of advisor needs to be very careful that their dominant attitudes do not overly influence the portfolio.

Learning Point:
The Initiator with a Take-Charge Visionary dominant trait will more independently set the direction of their overall planning. The advisor should aim to guide them by providing options and recommendations on investment choices. Ask the client: What goals would be the most important for you to achieve in your life? Have you built a detailed plan for your wealth creation?

To read about additional client behavioral styles, download the full Financial Performance in the New Behavioral Economy White Paper.

What are your thoughts?

Advisor Client Matching

This post is part 4 of our 8 part series on increasing Client Engagement from our Client Relationship Performance in the New Behavioral Economy White Paper. The insights will demonstrate in practical terms how to apply predictive behavioral insights to tailor client communication and provide unique client experiences.

Behavioral Insight 4: Advisor Client Matching

Earlier in this series, we learned about Chris Coddington and his meetings with a client named Frank Butler. Chris was given information about the 4 Communication DNA Styles and processes for discovering which communication style a client has. (Click here to read the previous posts in this series).

We asked Chris, Have you ever wondered why clients have suddenly left your business for no apparent reason? Or why some clients have taken a long time to make a commitment to your service? Why do some clients cause your heart rate to increase when they call? Or, what about that one-hour client meeting that has left you feeling exhausted?

The bottom line to all of these questions is that there is a lack of emotional engagement by Chriss clients. We said to Chris, You may be rationally serving the client very well, and he or she is satisfied with your service. However, the client is not emotionally connected to you, and therefore there is an inherent lack of trust. There could be many reasons for it. Usually the main reason will be that you have a different behavioral style from many of your clients. This will naturally lead to a gap in communication. Differences between people are wonderful, and they can be capitalized on to get great results. However, differences also divide and must be understood, accepted and respected by us in order to get along and build client relationships. This is also true of marital relationships, teams and business partnerships.

Advisor Client Matching, Know Your ClientWe suggested to Chris that in order to be successful in his business he would need to master the behavioral differences by adapting his behavior, and so would his team. As the Compatibility Matrix shows, it may be easier to match up to those clients who are similar to you in behavioral style. This means you have to adapt less and there will be a more connective energy. You can mostly be yourself and not have to worry about adapting as much.

However, the reality is that many clients, or at least their spouses, will be different to you. So you will have to adapt your behavior and communicate and serve clients on their terms. This is what we call the platinum rule of relationships.

We told Chris that a future trend will be advisors building client service teams that are a custom fit for the client. This provides the advisor with the opportunity to include team members with different styles to complement the advisors behavior. Imagine when a telephone call comes in and the team automatically knows who is to pick it up, then how to communicate with the client, and how to manage the work flow and even product or solution offerings. This really is the Ideal Advisory Business. Chris could also see that this strategy would be good for succession planning.

Matching Clients Based on Their Needs

Advisor Client Matching, Know Your Client, Financial Behavior

What are your thoughts? For additional information on increasing engagement of others, visit our Communication DNA Website.

To Learn More, read the full Client Relationship Performance in the New Behavioral Economy White Paper.

Discovering Communication Styles

This post is part 3 of our 8 part series on increasing Client Engagement from our Client Relationship Performance in the New Behavioral Economy White Paper. The insights will demonstrate in practical terms how to apply predictive behavioral insights to tailor client communication and provide unique client experiences.

Behavioral Insight 3: Discovering Communication Styles

In part 1 and 2 of this series, we learned about Chris Coddington and his meetings with a client named Frank Butler. Chris was given information about the 4 Communication DNA Styles (Click here to read the previous post in this series).

Chris commented that being aware of these four Communication Styles would be very insightful and made the mystery of knowing and then adapting to different clients much more concrete. The question is, How do I do this? In some cases there is not a lot of time to get to know a prospective client, or trust may not have yet been developed to have him or her complete a formal assessment.

We explained to Chris the most accurate and reliable way of getting below the surface to understand the clients natural DNA behavior is to have the client complete a validated online behavioral assessment. People have a natural personal bias based on how they see the world, which will somewhat shape how they see the client. Further, how you see another person is driven by how you see yourself. Our self-perceptions can change from time to time depending on the life and financial events we experience. This then makes what we personally observe not very predictable and often quite inaccurate. The key point we made to Chris was that the assessment process is objective and measurable.

Our advice to Chris was to present the profile request as a way of increasing his ability to serve the client. A simple request such as: We want to recognize your communication strengths and provide you with the highest service. Can you help us do this by completing this exercise, which will highlight your natural communication strengths and enable us to serve you in a great way?

Ultimately, no matter how personally evolved you have become, there will always be personal blind spots getting in the way of how you see others. This is normal. So, the ideal scenario is to have the client complete an independently administered profile to gain reliable insights, as natural DNA Behavior is inherently predictable.

However, in the event that this cannot be done, then good personal observation of the clients type of conversation, speech tone and facial features will help. We suggested to Chris that he use the following table as a guide in observing clients. A caveat was given that the observation views in the table may not always be an accurate reflection of the clients natural behavior, as some people mask who they are on the surface.

What are your thoughts? For additional information on increasing engagement of others, visit our Communication DNA Website.

 

Framing: Re-frame the Presentation of Ideas and Suitable Solutions

This post is part 2 of our 10 part series on Financial Behavioral Insights from our Financial Performance in the New Behavioral Economy White Paper. The financial behavior insights will help you gain greater self-awareness for recognizing some of your own behavioral tendencies and also those of investors.

Behavioral Insight 2:? Framing

Chris, a financial advisor, has invited 20 clients with similar levels of wealth and age to his office for a lunch and learn presentation by Paul Southwick on a new investment strategy. The new strategy is to provide a mix of dividends and capital growth with some downside protection. Chris has vetted the investment and believes it will fit his clients well. Paul uses a PowerPoint presentation with great content in it about the bottom line of the investment and is an articulate presenter. As he goes through the presentation there are clearly some who get it and want to sign up, there are others who are totally confused by the details and switched off, others who want to do more research and some who need to understand how it meets their security needs. After the lunch Chris is very concerned about the mixed reaction and losing client trust. He knows the product is sound and he will invest personally.

Behavioral Insight
The difference between what the advisor said and what the client heard will be attributable to the behavioral lens of each. The communication of products and solutions must be adapted.

Framing, financial advisor, customizing the message, customized experience, client engagementHave you ever attended a presentation like the one Chris arranged and been de-energized, bamboozled and confused by the investment proposal and not responded? Understanding investors learning styles and propensities for receiving information, new ideas, strategies, products and solutions is critical to successfully presenting to them. This will increase the chance that they understand the proposal for what it is and how it is relevant to them.? The mistake many advisors and fund managers make is that they naturally present to investors through their own lens. Instead, they should be re-framing how they present to be much more on the investors unique terms.

Advisors need to appreciate that with 20 people in the room there could be 20 different reactions, because each person is unique. The best way to get around this is to re-structure the proposal being presented into 4 quadrants so that each broad category of behavioral needs is addressed: 1. The big picture and how it relates to achieving goals and bottom-line returns, 2. Indicate how their lifestyle needs are met along with telling them the names of the people involved in managing the product or solution, 3. Address financial security and provide feelings, 4. Make the solution tangible and provide the history and research details.

Learning Point:
Advisors need to use behavioral insights to customize their communication with clients and to re-frame the presentation of ideas and suitable solutions so the client interprets the information as intended.

What are your thoughts? For additional information on discovery through behavioral profiles, click here.

Resistance to Financial Planning

Last week, there was a Financial Planning Association group discussion in which someone posed the question: Why do people resist creating a formal financial plan.

This is a great question and gets to the core of financial planning.

Many people do not know what financial planning is. I think many financial planners are still learning what it means to them. As the industry grows and comes to more of a collective view then this will help. Is the planner about achieving returns or helping a client achieve life and consequently financial goals? What role is the planner playing in the client’s life?

Those who accept the planner as their financial life guide will more likely do a financial plan. Another key point is the person’s level of personal trust. Do they have fears about planning and sharing themselves and getting help? Do they trust the planner? Both issues are at work.

I also find that if the planner is not a trusting person (and our research shows 70% are not) then this is not conducive to building relationships and getting planning commitment. The question of trust gets down to both a person’s DNA behaviors and their life experience. The more the planner represents product and is not independent then trust will also be harder to build.

Ultimately, the more a planner seeks to know their client and make the client feel they are understood then the chances of getting the plan done increases. Further, retention will increase. The client is not a financial number but a person whose life constantly develops.