As a Financial Advisor, how do you advise Entrepreneurs

Advising Entrepreneurs, as a Financial Advisor

A good idea, a solid strategy, an understanding of clients genetic makeup could be a ticket to their success. But without this insight – failure is more likely both for you as an advisor and for the client who wants to be an entrepreneur.

DNA Behavior International’s extensive research from recent academic research and studies supports the findings that a person is born with entrepreneurial genes. Providing advice to a client like this could be tricky.

A key for financial advisors is to understand the genetic makeup of an entrepreneur. What makes them tick. All entrepreneurs have similar characteristics. Their minds are genetically wired in the same way. In other words, they tend to depart from established patterns of thinking. Their resilience and appetite for risk are inherent qualities. The more mindful financial advisors are in their understanding of the entrepreneurial mind, the greater the chances of success in delivering sound targeted advice.

The Business DNA research concludes that entrepreneurs have the following genes in descending order of dominance:

  1. Resilience (Measured by the Fast-Paced trait) – they achieve results, manage setbacks and rationally take quick action.
  2. Risk Taker (Measured by the Risk trait) – confidently take risks and tolerant of losses.
  3. Creativity (Measured by the Creative trait) – innovative with ideas and seeks to differentiate.
  4. Work Ethic and Focus (Measured by the Pioneering trait) – pursues goals and is often ambitious and competitive.
  5. Charisma (Measured by the Outgoing trait) – outgoing, connects with a lot of people and influences people to follow them.

Entrepreneurs are confident, passionate and determined to succeed. They are comfortable taking the risk and will invest heavily in their business venture, maybe to the detriment of other areas of their life.

However, being genetically predisposed towards entrepreneurialism doesn’t guarantee that an individual will become an entrepreneur and then whether they will succeed. It is not just enough to be born with the entrepreneurial gene, people must do something with it. Financial advisors need to be able to dig below the surface to understand the dynamics of the entrepreneurial client and then can target advice.

Behaviorally smart financial advisors should be:

  • Comfortable being a user to test the financial validity of an opportunity.
  • Confident enough to challenge ideas and ask questions.
  • Trustworthy enough to encourage yet confront when the entrepreneur’s ideas are spinning out of control.

When financial advisors understand that Entrepreneurs are driven by the need to succeed and control their own destiny, they are less likely to put them in a client box. They won’t deliver mundane advice but will recognize the importance of getting inside the mind and genetics of an entrepreneur.

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

do not let behavioral biases cost you money

Don’t Let Behavioral Biases Cost You Money!

A key principle to remember is that each client reacts differently to the same market events. This is because they each have a unique mix of behavioral biases. This begs the question, how will you manage your different clients’ emotions as the market changes?

In the financial planning process, some clients tend to make financial decisions that are based on past experiences, personal beliefs, what they like and to avoid mistakes. Fewer people make well considered forward thinking, long-term life financial planning decisions. But, each approach suggests a bias.

Writing for News Limiteds The Australian, Platinum Asset Management co-founder and managing director Kerr Neilson asks the following question.What is the biggest factor in investing? What is it that separates the winners from the losers? You might think its experience or numeracy or a particular understanding of an industry. All of these factors will be relevant, but the distinguishing feature is surely the presence of bias.

This is an interesting thought and much in evidence in the financial fraternities articles and blogs. But what is bias? How does it play into financial decisions? Can it be uncovered?

Investopedia explains ‘Bias’ as:

Some common psychological biases plaguing investors include: representative bias, cognitive dissonance, home bias, familiarity bias, mood and optimism, overconfidence bias, endowment effects, status quo bias, reference point & anchoring, law of small numbers, mental accounting, disposition effects, attachment bias, changing risk preference, media bias and internet information bias.

Can behavioral biases be uncovered?

Yes they can, because each person has an inherent hard-wired behavioral style which is the core of who they are and can be predicted with the right discovery process. Behavioral biases influence not only their behavior, but also their decision-making process. Daniel Kahneman (winner of the Nobel Prize in Economics) refers to this as a persons automatic decision-making biases in his 2012 book “Thinking, Fast and Slow”.

Robert Stammers, CFA Director, Investor Education notes in his article for Forbes – Perhaps the best advice for individual investors regarding bias is this: Avoid trying to outsmart the markets and instead work to outsmart yourself. Through self-examination and reflection, learn to recognize your own biases when they rear their heads.

Financial advisors need to be able to uncover a clients biases. Having this insight in advance of planning not only enables the advisor to educate the client, but it also flags areas where the client can be steered away from their emotional bias, which results in taking action based on feelings instead of facts.

Writing for the European Financial Review, H. Kent Baker and Victor Ricciardi observe:Investor behavior often deviates from logic and reason. Emotional processes, mental mistakes, and individual personality traits complicate investment decisions. Thus, investing is more than just analyzing numbers and making decisions to buy and sell various assets and securities. A large part of investing involves individual behavior. Ignoring or failing to grasp this concept can have a detrimental influence on portfolio performance.

A useful starting point in the advisor/client relationship is to uncover and understand that you, as an advisor, have your own investment biases and blind-spots that must be managed so that clients are not influenced by your behavior. Revealing these biases for the advisor, as well as the client, ensures a) the relationship will be built on trust and b) it will help mitigate the influence bias or predilection can have on decision making.

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–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.

What is the Ideal Advisor?

Every person is unique and has unique needs and circumstances.

Each client wants to be related to and served differently because their financial personality is different. This should be one of the primary drivers of who they seek out as their advisor to build a life time advisory relationship with.

Leadership in the Financial Industry

However, foundational to the choice for clients is that the advisor is capable of providing them with a comprehensive service that holistically addresses all of their life and financial needs. The CFP Board has recently conducted a research study that found:

91% of those surveyed said they wanted their financial advisor to take into account their total financial situation, while 70% said they would prefer to work with an advisor who provides comprehensive financial planning services. Thirty percent said theyd prefer to work with someone who specializes in one area such as retirement.

This research provides good insights for advisors building their practice.

Read more at the Think Advisor website.

Although, comprehensive planning is required by clients ? it is still important that advisors know their strengths and struggles so that they always play their A game in attracting and serving the right clients.

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

Try Financial DNA Free for 30 Days.

What Drives Your Financial Decisions? Know Your Behavior Style.

As a financial adviser to doctors, dentists and small business owners for more than 25 years, Rick Helbing of Suncoast Advisory Group has long studied people and how they make financial decisions.

What people say and do are not always compatible, said the Sarasota, Florida financial planner. Despite what clients would tell him about their financial goals in the discovery process, they could unravel a carefully developed plan in one moment of emotional stress.

So several years ago, Helbing started determining clients behavior styles using profiles powered by DNA Behavior, to gain insight into their financial decision-making process and possible self-sabotaging behavior. Through the use of questionnaires and analysis, these profiles offer a deep understanding of a persons financial and personal make-up and include all the predictable, natural, hardwired behaviors that instinctively take over when a person is under pressure or stressed. (Remember the economy and markets in 2008?)

Financial Planning, Financial Personality, Quality Life Planning, Perpetual Income

Your natural go-to behavior takes over your learned behaviors, said Helbing. It is who you really are versus who you think you are or want to be.

Clients receive four reports that uncover their Communications DNA (how they want to be communicated with), Quality Life Performance (quality life drivers including life purpose, career, finances, health and recreation, community, relationships, confidence and wisdom), Financial DNA (inherent life and financial motivations) and Financial Personality (risk tolerance and financial behavior).

Knowing his clients DNA helps Helbing adapt so that he can more effectively communicate with them, and gives him a true picture of their risk-taking behavior. For example, research has shown that a persons risk-taking propensity and risk tolerance are really two different behaviors. More than 20 percent of people have a greater propensity to take risks than their ability to live with the consequences of taking them (or tolerance).

At first I started incorporating the DNA Behavior tools into my client relationships, but now they are 100% of my discovery process, Helbing said.

Developed by behavior strategist Hugh Massie, founder and president of DNA Behavior International, these tools have been independently validated with research by the International Center for Behavioral Research and a team of independent consultants from Georgia Institute of Technology in Atlanta.

In a nutshell, there are 10 behavior styles:

-????????? Strategist (realist, analyzer)

-????????? Initiator (visionary, reflector)

-????????? Influencer (visionary, people connector)

-????????? Engager (people connector, intuitive)

-????????? Community Builder (people connector, stabilizer)

-????????? Relationship Builder (stabilizer, compliant)

-????????? Facilitator (reflector, stabilizer)

-????????? Adapter (a blend of all styles)

-????????? Stylish Thinker (analyzer, people connector)

-????????? Reflective Thinker (analyzer, reflector)

Each behavior style has a different relationship to money. For example, the Influencer and Strategist both relate to money in terms of goals and are likely to take some risks. However, Influencers will likely spend it to raise their profiles, and will tend to be more flamboyant in the process and connect to many people to share fun and lifetime experiences, whereas Strategists will tend to be savers and concerned about ensuring their financial security. This could make them hoarders, living more modestly than they need to.

For clients, knowing who they really are will help them understand and therefore manage their behavior. With mentoring from Helbing, they can learn to build on their strengths and minimize their risks. Also, knowing the behavior style of their spouse or business partners will help them communicate more effectively and unlock any blockages to decision-making. This also helps to facilitate multi-generational communication and long-term wealth building.

Once you know your behavior style, you can be aware of how you sabotage your own goals, said Helbing. Many clients have told me that knowing their Financial DNA has freed them to be able to relax and let the financial plan play itself out.

Rick Helbing is the co-owner of Suncoast Advisory Group enjoys a national reputation in crafting plans for physicians, dentists, and family-owned businesses. The firm is headquartered in Sarasota, Florida, and maintains an office in Jacksonville, Florida. Website:

Try Financial DNA Free for 30 Days.

Why Helping Your Clients Know Their Number is an Old School Approach

Have you ever had a client tell you their number? You know, the net worth number that will make them happy. Or that number they ask you to calculate so theyll know theyll be okay?

Focusing on this number is outdated, a mistake and I contend will actually hurt someones chances of reaching their long term goals. Heres why:

You are encouraging your client to focus on the wrong thing. When someone focuses on a future number they arent focusing on what they need to do to get there. Unless they are planning for a short term liquidity event, such as selling a business or winning the lottery, having a big number in their head doesnt do anything to move them toward the goal.

Helping Clients Know Their Number is an Old School ApproachClients may very well use this number to gauge their progress. One of the positive impacts of goals is that they give us a target to move towards. One of the negatives is that when we dont hit them we feel as if weve failed. When we put our attention on missing a goal, our energy is on the failing as opposed to the achieving of the goal.? For example, if your goal is to drive to Denver and you hit a detour and find yourself in Birmingham it doesnt get you to Denver any more quickly by feeling badly youre in Alabama. Instead, if you get a map or use your GPS to guide you to your preferred destination youll have a much easier time actually getting there.

In his Psychology Today blog Ray Williams surveys various research articles looking at how goal setting doesnt work. He quotes L.A. King and C.M. Burton in an article entitled, The Hazards of Goal Pursuit, for the American Psychological Association. They argue that goals should be used only in the narrowest of circumstances: “The optimally striving individual ought to endeavor to achieve and approach goals that only slightly implicate the self; that are only moderately important, fairly easy, and moderately abstract; that do not conflict with each other, and that concern the accomplishment of something other than financial gain.”

Williams continues:? There is an addiction in our culture to getting more, the going for the goals hype is disconnected from peoples’ authentic selves, and their values.there are psychological manifestations of not achieving goals that may be more damaging that not having any goals at all. The process sets up desires that are removed from everyday reality. Whenever we desire things that we don’t have, we set our brain’s nervous system to produce negative emotions. Second, highly aspirational goals require us to develop new competencies, some of which may be beyond current capabilities. As we develop these competencies, we are likely to experience failures, which then become de-motivational. Thirdly, goal setting sets up an either-or polarity of success. The only true measure can either be 100% attainment or perfection, or 99% and less, which is failure. We can then excessively focus on the missing or incomplete part of our efforts, ignoring the successful parts. Fourthly, goal setting doesn’t take into account random forces of chance. You can’t control all the environmental variables to guarantee 100% success.

If youre not buying the danger of goal setting argument, then consider that making the number the goal is the wrong goal. People think that having a money goal will motivate them to achieve it. Actually, they are focusing on the wrong incentive. People may think they are motivated by money or advisors may think clients are, but really people are motivated by what they money will do for them. The money might help them leave a job they hate, pursue a hobby they enjoy, give to causes they believe in, etc.

Build better relationships with clients and do a better job supporting them in getting to where they want to go.The number is a meaningless moving target. I had a client who told me at our first meeting that his number was $5,000,000. When he got to $5 million he said, Oh, I guess that number doesnt really make me feel like Im there. I think its really $10 million that would have me feeling okay. Guess what, $100 million might not make him feel okay. The feeling of security or knowing that well be okay isnt typically related to the number, but rather our beliefs about what okay is.

As advisors, many of us create financial plans for our clients, run projections, make assumptions etc. We help our clients create a road map for their financial futures. Anyone who has been in business over the past ten years knows that our projections are just that, projections. The world often changes in ways we cant anticipate. What we are really doing for our clients by creating a financial plan is to provide them with a plan that satisfies their logical minds and really serves to ease their concerns about the future. When we can calm our clients worries we help them to make much better decisions with their money.

There are real benefits from the financial planning process. As advisors we need to expand our views about all the benefits a plan provides. When we move past the left brain logical benefits and expand our focus to the more right brain behavioral benefits well build better relationships with our clients and do a better job supporting them in getting to where they want to go.

As a 21st century advisor make sure you understand your clients well enough to know:

  • What they want their retirement to look and feel like.
  • The most important people in your clients lives and how they want to be involved with them in the future.
  • The causes important to your clients and what impact, if any, they would like to have on these causes.
  • How strong their internal barometer is for making adjustments in their financial lives based upon whats happening in the world.
  • What they really need from you to make solid financial decisions.

Helping clients to tap into their motivation behind their number will allow us to be much more effective in helping them get to where they want to go. People are motivated by avoiding pain and moving toward their passions. To succeed as an advisor in the coming years it will be crucial to expand the conversation from just the numbers to instead, focusing on intentions and passions. This is what it will take to truly move people closer to their desired outcomes.

Ellen Rogin, CPA, CFP
is the co-author of Great with Money: 6 Steps to Lifetime Success and Prosperity. She speaks and consults to the financial services industry on business building strategies and working successfully in the women’s market. To learn more and to sign up for Prosperity Tips visit