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Financial Advisors See Data as a Differentiator

This article first appeared on Nasdaq.

With financial advisors under considerable pressure to strengthen their competitive position through an improved understanding of their clients, adding a behavioral insight tool to the client onboarding process can help advisors obtain new insights about a client’s behavior and financial personality.

In doing so, it is imperative for firms to interrogate this data that is relevant to each client. The way to use data as a differentiator is to know clients at a deeper level. Their decision-making style, spending patterns, goal-setting motivations, approach to and tolerance of risk, behavioral biases, and responses under pressure, as well as knowing each client’s likes and dislikes and life journey.

Measuring and discussing financial behavior is the first step for advisors to get to know their clients. And we already know that, for advisors to provide valuable advice, it is key that they understand clients and client goals.

Gone are the days of form filling. Advisors need in-depth, accurate information at their fingertips. Clients already understand that life requires them to be subjected to an array of technology experiences. They get it.

What many clients do not accept is poor service. For instance, feeling that they are not front and center of the relationship. Feeling they are a statistic. Feeling like the financial advice they are getting or the way they are getting it is generic or ill-matched to them.

When advisors start to deploy technology which delivers a great experience for their clients, then and only then will they gain a competitive edge and restore broken trust.

The use of application programming interfaces (APIs) is presenting a new and exciting range of possibilities to financial advisors. Essentially, APIs act as a sort of plug in, bringing a specific functionality to other, already up and running systems, so an advisor, group of advisors or small or large organization can add bells and whistles to a system without having to invent/reinvent their own.

Such an API can permit the flow of information between applications and give financial advisors the ability to, in this circumstance, easily access on a real-time basis client data, gain insights and offer innovative solutions tailored to the clients’ life plans while complying with regulatory requirements

Through the magic of APIs, “behavior tech” platforms can now be white-labeled and inserted inside organizations so that they can access scalable and easy-to-use online behavioral management solutions to know, engage and grow every client (and their advisor!).

APIs like this are not tomorrow’s solutions. They exist now, waiting only to be embraced and leveraged. This is the power – here and now – to use behavioral insights to create truly unique and robust experiences for advisors and clients. It engages clients in a way that demonstrates the degree to which advisors will go to enhance the financial planning experience – and the success they can have with and for a client.

Every financial advisor should be able to use interactive business intelligence tools to drill down into client information. In advance of every meeting or phone call the advisor should, at the click of a button, be able to deploy dashboards and personalized information to respond to client needs. This approach can and will create an experience tailored to individual clients’ needs.

Clients and advisors alike want “easy” and they’ve got it if the right API or behavior tech solution is deployed. Everything is right there on their mobile devices.

DNA Accredited Financial Advisor Training

DNA-Accredited Financial Advisor Training Provides Edge

We are excited to be hosting DNA Accredited Financial Advisor Training for two days, April 24-25, in Atlanta. Space is limited, so please register soon.

The comprehensive workshop is for financial advisors and wealth managers already familiar with the Financial DNA Discovery Processes, which advisors use to learn the communication styles, financial habits (including setting goals, spending and saving) behavioral biases and risk profiles of clients.

As many of our readers know, Financial DNA provides real-time behavioral insights that enable customized delivery of meaningful advisor and client experiences, with improved outcomes on both sides of the relationship. The workshop builds on the foundation of Financial DNA-savvy advisors, helping them become what we call Human Performance Accelerators, learning unique financial personality insights to further help clients achieve greater self-empowerment- and wealth accumulation.

The training also is recommended for any organization considering implementing a DNA financial personality management API solution.

The six pillars of DNA Financial Planning Performance will be explored in-depth using the company’s proprietary behavioral insights tech platform. (The only validated behavioral insights fintech of its kind.) Attendees should then be able to not only deliver better client outcomes, but also be able to increase and sustain profitability.

The practical and experiential training program addresses Natural (inherent) Behavior and How to Deploy the Financial DNA Discovery Process to meet the behavioral challenges of every client on their own unique terms.

  • (Advisors) discovering their own strengths and struggles;
  • Learning how to use behavioral insights in relating to different clients more effectively; and
  • Identifying ideal clients and keeping them engaged.

Also covered: Learned Behavior and Additional Behavioral Finance Insights, including:

  • Techniques for improving client meeting facilitation with powerful questions across multiple communications channels; and
  • Building behaviorally smart portfolios which align client risk-taking, decision biases, goals, spending and financial capacity.

Attendees also will benefit from a very special new offering: An interactive dinner, Thought Accelerators: Future Fintech, at which training participants ranging from beginners to experts will discuss behavioral insight challenges and solutions, further activating what they have learned toward practical, powerful outcomes.

Complete information and registration for DNA Accredited Financial Advisor Training can be found here. Location information – Dunwoody (North Atlanta), just outside the perimeter – is included at the information and registration link. Those completing the two-day training will receive DNA Accredited Financial Advisor certification.

Who should attend? Financial advisors, wealth managers and others who want to master validated behavioral finance insights that accelerate the results achieved by both advisors and their clients. And, again, the training also is recommended for any organization considering implementing a DNA financial personality management API solution.

See you in Atlanta April 24-25. (Can’t make it then, let us know so we can notify you of future trainings and Thought Accelerator dinners.)

Financial DNA offers:

  • Unparalleled depth and reliability of psychometric validation for 64 core natural behavior traits to identify a client’s unique financial personality;
  • Separate measurement of a client’s communication style, spending and goal-setting behaviors, risk profile and behavioral biases;
  • Unique process for matching advisors, clients, and solutions using our extensive behavioral finance data;
  • Comprehensive wealth mentoring system to help advisors guide their clients in making life and financial decisions; and
  • Digital solutions for practical and scalable delivery across a firm’s whole client base.
For the right financial advice get the relationship right

For The Right Financial Advice, Get The Relationship Right

This article first appeared on Nasdaq.
No two people’s financial situations are ever the same. Finding a financial advisor who really understands that and who can deliver truly tailored advice is getting progressively more difficult.

So, it is increasingly incumbent upon financial advisors to have a depth of behavioral insight in order to deliver a significant level of personalized advice. Some advisors have taken steps to obtain a range of behavioral finance tools to ensure they are meeting client needs.

But the use of scientifically based data gathering tools is only part of the solution. The core objective, and a regulatory requirement, is to put the client first. If financial advisors are proactive in demonstrating their absolute commitment to delivering individual client-based solutions, they’ll be demonstrably more successful, as reflected by client satisfaction, retention and referrals. Behaviorally smart financial advisors don’t wait for regulatory requirements to force them to seek out ways to more effectively understand client communication:

  • They learn how to communicate with clients who find money an emotive subject;
  • They know how to satisfy the client who wants to be presented with exciting opportunities;
  • They know how to talk to a risk taker who needs to put the brakes on;
  • They invest time and resources into holistically understanding client’s financial personalities; and
  • They learn the methods for revealing information, hidden below the surface, that is pertinent to client’s financial well-being.

Be the advisor about whom a potential client thinks, she could become my financial coach and mentor. Or, I believe this advisor is the guy with whom I can work for years that my family will rely on as they need financial advice and make life decisions.

Sadly, many clients don’t feel empowered to engage new advisors. Often this reluctance to change their advisor is simply because trust is at an all-time low. Therefore, better the devil you know holds.

A colleague’s insight

A recent conversation with a colleague is worth sharing:

Many years ago, I wanted to invest in an exciting start-up. Something about this?entrepreneur and his ideas excited me. My financial advisor wouldn’t even discuss the opportunity, referring to me as a novice in terms of investing and to the entrepreneur as a seven-day wonder. The advisor had no idea about me, my plans for my life and indeed I think saw me as an amateur.

As I am reminded of that incident many years ago, I wonder if the advisor (long since out of my life) remembers the conversation as he watches the multi-billion-dollar empire this young man went on to build.

All it would have taken for this story to have a different ending, was an advisor who understood that I dont take risks, but that I am very savvy when I see an opportunity, and that at that time I could well afford the amount I wished to invest. But that advisor had no idea how to communicate with me.

That is just one of the many anecdotes we hear.

Client-centric for the win

It’s time for advisors to approach their clients as though they were their financial advisory soulmate. Working toward matching clients with advisors, based on communication style and the understanding of behavioral biases and decision making, will build confidence for the client, and enhance relationships for the advisors. Such a customer-centric transformation – that is, putting the client first – builds trust and attracts more customers.

Not every organization can afford to invest in sophisticated technical solutions, but even the smallest of advisory firms can and should invest in a process that reveals client’s financial personality and communication style at a deeper level.

Restoring trust and faith in a battered and bruised financial sector starts with you. With putting people before numbers. With relationships.

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

financial-advisors-are-you-ready-to-embrace-artificial-intelligence

Financial Advisors: Are You Ready To Embrace Artificial Intelligence?

This article first appeared on Nasdaq.

And the hits keep coming, so to speak. Never has every move, decision, and interaction with clients of financial advisors been analyzed to this degree. And that will only become more prevalent. Any form of questionable practice will be identified and challenged. It begs the question, are financial advisors ready to embrace artificial intelligence?

The use of Artificial Intelligence (AI) tools to monitor regulatory compliance is a conversation that is heating up, not just within financial services firms, but within regulatory agencies who are now considering both AI and machine-learning tools to enforce compliance.

This increased automation using AI focuses on Know Your Customer (KYC) rules, Anti-Money Laundering (AML) rules, and tax reporting.

AI isn’t all about policing the industry; its broader use can be used for financial advisors to analyze and understand how account holders spend, invest and make financial decisions, so they can customize the advice they give. The role of the financial advisor will change significantly as machines take over routine aspects of the service offering. The gap left is the key to improving the financial service.

Many organizations that deliver support to financial advisors recognize the importance of understanding people before numbers in financial planning. These organizations tend to be early adopters of AI.

Behaviorally smart financial advisors already use a validated scientific discovery process with their customers in advance of the first meeting. This measurable insight into the customer’s personality, the client’s communication style, risk patterns, decision-making approach, and reactionary market movement pressure points, is available at every touch point so clients can be managed honestly, openly and transparently.

The significance of revealing natural and instinctive financial personality and delivering targeted advice provides assurance, so advisors know the client at the deepest level – among other reasons, to mitigate compliance risks.

Information obtained from the use of an automated discovery process puts clients at the center of the financial planning process; matches advisory teams, clients, goals, and solutions; enables a customized communication approach at all stages of the client lifecycle; builds tailored portfolios; behaviorally manages client emotions; and enhances compliance and reduces complaints.

The financial industry is waking up to the use of AI. It is asking the right questions in terms of how it can add value to business models and satisfy regulatory requirements – thus demonstrating to a skeptical public that they are cleaning up their houses.

Like all technology, AI needs to be in partnership with humans. Financial advisors who use a validated financial personality discovery process work more effectively and efficiently by filtering key information from their client’s online personality profiles to inform the advice they give.

The danger is that too much focus is placed on the use of AI for detecting and analyzing brand sentiment or providing investment insights, even identifying rogue behavior – and yet missing the greater use: Getting to know the customer at a deeper level to deliver the best and most accurate advice.

The financial sector is, in a sense, being forced into this new world. Lack of trust, media and regulatory bodies sharpening their focus on compliance ensure the industry is rushing to find solutions that satisfy regulatory compliance, including staying within the bounds of the DOL’s new fiduciary rule.

Traditionally, a slow-adapter industry, the financial sector has been dipping its toe in the water in terms of using robo-advisors. Investors are drawn to this service as they no longer need to pay substantial fees for something they don’t want, need or in some cases get.

Artificial Intelligence used as a tool to put the client front and center of financial advice can and should be pursued. Technology that reveals below-the-surface information about clients will empower advisors to proactively engage said clients on what matters to them the most and on their terms.

Financial advisors, whether individual practitioners or part of a corporate organization, can no longer get away with pushing inappropriate product to investors. The customers are smarter, and the regulators clued in, so what is the smartest change to make to begin to get back the trust of customers? AI.

Get to know your customer at a deeper financial and personal level. Uncover what they want to do with their wealth. Build a relationship based on understanding their inherent approach to life, offering emotional support and becoming the go-to person when they make life decisions.

Much can and will inevitably be managed by AI automation, but most investors will want the human touch. An advisor who knows the importance of a quick phone call to a client when markets wobble or sending an interesting opportunity to an investor able to manage risk – these are the service touch points that maintain or help rebuild trust in the industry.

Financial advisors need to embrace artificial intelligence in general, and financial personality discovery tools in particular, if they are to stay ahead of the game, deliver more relevant offerings to the client and build long-term relationships.

Why not complete your own complimentary profile and see which behavioral biases may affect your financial decision-making. Click here.

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

Startup entrepreneurs working on their venture in co-working space

Diversity and Inclusion Make Teams Great

This article first appeared on HR Management.

Is diversity and inclusion (D&I) in organizations and teams just the latest HR craze? Or maybe just a nod to equality compliance?

Neither. D&I, when introduced appropriately, mines the rich and often untapped talent within an organization. In fact, understanding what D&I means when implemented within a business can be the change that takes an organization from mediocrity to greatness.

Applied to teams, D&I opens doors to innovation, experience, creativity and an unmatched depth of knowledge. But – and it’s a big but – a multifaceted D&I strategy, if not handled appropriately, can lead to chaos and confusion.

The key is to tap into the inherent behaviors and biases of individuals. A highly-validated behavioral discovery process (think a quick-but-thorough assessment tool for every team player) will deliver this insight quickly, accurately and with comprehensive reports that cover every aspect of an individual’s inherent workplace and life behavior.

Such a process provides insight into hidden abilities, revealing behaviors below the surface that, if not managed, might result in disruptive behavior that could unsettle the team. It will highlight communication styles, which helps build a more engaged and productive workforce. Further, the process delivers a culture of openness, mutual respect and trust in the business environment that should satisfy any cultural or legal requirement.

Be mindful that D&I isn’t just about ethnicity, religion, gender, gender identity, sexual orientation, and other such factors; its also about the behaviors that drive performance and reveal (and channel) such behaviors, biases and communication styles to foster successful team outcomes.

Harnessing these differences without the use of a behavioral insight tool can be challenging, if not impossible. People with different backgrounds bring unique information and experiences to tasks. They also bring a significant range of communication styles, decision-making approaches, and thought processes.

In any team, there will be those who passionately and tenaciously bring a vision to completion. Others will be spontaneous, creative and challenge conventional ideas. And there will be those whose experiences and behaviors cross-pollinate, bringing unique perspectives and approaches to work in different functional areas.

Plus, its good business practice to embrace diversity and inclusion: Complex and challenging issues are more likely to be resolved when a team includes a range of talents, thought processes and behaviors.

Dr. David Rock, co-founder of the NeuroLeadership Institute and Summit, and Dr. Heidi Grant, a social psychologist, note in the Harvard Business Review that, striving to increase workplace diversity is not an empty slogan – it is a good business decision. A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35 percent more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15 percent more likely to have returns above the industry mean.

Teams formed based on diversity and inclusion that are behaviorally aware, behaviorally smart and which include a range of different skills, are more likely to examine facts, consider a range of options and opinions, and remain objective. They will challenge each other professionally, without causing offense or disconnect. Biases will be openly discussed and resolved. Counterproductive thinking will be constructively argued to find mutually beneficial solutions. All of this leads to more effective decision making and organizational and business improvement.

As an example, Bain and Co. research shows that decision-making effectiveness is 95 percent correlated with financial performance.

Still, diversity and inclusion cannot be a one-off initiative. You should incorporate D&I at the hiring stage, and it’s a continuing work in progress, made more effective by the introduction of tools that reveal hidden behaviors and communication styles. D&I evolves, so your approach should too.?Diversity and inclusion make teams great and inclusion will set your organization apart from your competitors and improve your bottom line.

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

Measure Behavior for Better Hires

Measure Behavior for Better Hires

Whether your organization is up and running or you are an entrepreneur facing your first hire, you may have valid questions around the hiring process. Is this the right time to hire? Do I have a recruitment process that fosters ongoing employee engagement? And if you really want to be poised for hiring success, youll hopefully include behavioral insights in your hiring equation:

  • Have I benchmarked the typical behavioral characteristics needed for specific roles?
  • Am I clear about the talents and the behaviors I expect from the hire?
  • Do I have quality behavioral questions to use during interview?

The cost of making the wrong hire is clear. One study cites 69 percent of employers in 2012 reported that a bad hiring decision placed a strain on their company. Twenty-four percent of companies reported that a bad hiring decision cost them well over $50,000, with a larger 41 percent of businesses reporting a figure of over $25,000. Other findings put the figure at over $40,000 to replace an executive employee, and anything from $7,000 to $10,000 to replace an entry- to mid-level employee. According to Entrepreneur magazine, citing a Robert Half survey of financial professionals, in 95 percent of cases a bad hiring decision can affect office morale. Likewise, Gallup estimates that there are 22 million actively disengaged employees costing the economy as much as $350 billion per year in lost productivity. These costs are in addition to the cost of replacing a bad hire. When you know 87 percent of business issues are people-related, its not hard to see how important the hiring process is. According to a Deloitte Insights article from 2015, culture and engagement is the most important issue companies face around the world. Consequently, the hiring process must include:

  • Benchmarks of inherent natural behavioral talents and communication styles.
  • Benchmarks of talents required for different roles to the candidates talents
  • Benchmarks of the typical behavioral characteristics needed for high performance in specific roles, so the right people can be hired for that role.

This insight would not only deliver the right people for the job, but also enable more effective matching of individuals to teams and line managers. This same sort of matching also can provide value by aligning customers with your organizations representative(s) who can best serve them. Too often, people are employed for their skills and knowledge, with little or no attention paid to identifying a candidates true talents – those natural behaviors which continually and predictably repeat over time and are often not easily seen in an interview. When a highly-validated discovery tool is introduced into the hiring process, it not only reveals talents, behaviors and communication styles – all of which are measurable,it also reveals how the individual will respond under pressure. This insight allows the interview process to include specific behavioral questions that drill down to a candidates masked behavior, which likely only surfaces under the weight of a busy workload or, worse, in conflict with colleagues. Without a behavioral discovery process, over time and with pressure, the natural behavior emerges, and the candidate may not perform as hoped. Anyone involved in the hiring process also has blind spots and biases that likely form part of any failure to uncover the natural behaviors of the interviewees. Having a strong hiring process supported with robust discovery processes and strong behaviorally based interview questions will flag warning signs around an otherwise talented candidate. It could be that their moral compass when tested is lacking. It might be that under pressure or in a season of fast change to the organization they get left behind and this opens the potential for them to go rogue. Smart employers will know the value of having this information up front.

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