4 Critical Questions Financial Advisors Need to Answer Now

4 Critical Questions Financial Advisors Need to Answer Now

Amid the COVID-19 pandemic, financial advisors amongst other professionals are facing new challenges in the way they manage their clients’ investments and communicate with them. It is no secret that no matter how many financial crises we have gone through in the past, these are uncharted territories that we are all learning to navigate. As a financial advisor, it is your responsibility to consistently communicate with your investors and reassure them that you do have a plan.

Choosing who to trust to manage their wealth is one of the most important financial decisions your clients will ever make, and now more than ever is the time for you to show them the value you are bringing, and how much of a quantifiable impact your expertise has on their financial success. If you haven’t already, you can soon expect to receive wary phone calls from your clients seeking reassurance about their investments. These are the 4 critical questions you need to be ready to answer:

1. Am I going to be okay?

At this time, what your investors need more than anything is reassurance. It is hard not to worry about the impact of this market downturn on their financial future, and the only person they can turn to for guidance is you. Your role is not only to develop an investment strategy designed to meet their goals, but it is also managing their expectations during market volatility. Financial DNA can predict which clients are the most fearful and how to communicate with them, we call this Market Mood.

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2. Do we have an alternative financial plan?

This right here is what makes all the difference between many brokers and financial advisors. Your number one responsibility is to put your clients and their money first. Your expertise is used to its full potential in times like these when it is a matter of speculating what comes next, and what is the right move for their investments. This is an inevitable conversation that you are bound to have with your investors, and the key here is to identify every client’s unique set of communication patterns and comfort zones, and approach this conversation with those insights in mind. You see, every behavior drives a specific fear, that you need to unravel and address.

For example, if your client’s behavioral type happens to be Strategist (one of the ten unique styles of Financial DNA), the most effective way to approach this conversation is by having a quick phone or Zoom call, where you reassure your client and reinforce the fact that the volatility of the market will not derail achieving their goals, and provide a clear plan for how this is actually an advantage.

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3. What steps are you taking to proactively anticipate change and new opportunities that are right for me?

Some clients (particularly those that have a higher risk profile) will react to the current market events with an opportunistic eye. For these clients, they are interested in the strategy and opportunity that they can take advantage of with the current market. We coach advisors to identify these clients with this Market Mood and use this as an opportunity to increase their AUM.

The truth is, this question is not necessarily tied to times of crisis. The very purpose of a financial advisor is to constantly anticipate changes in the market, and identify new opportunities for their investors. The COVID-19 pandemic-induced market instability is no exception. What your investors are really asking is “How much should I expect to lose?” and “Is this a buying opportunity?”

The key here is to re-address their risk tolerance. Financial DNA advisors do this by re-focusing clients back to their Financial DNA results. The results don’t change when the market changes, allow your client’s financial behavior, behavioral biases, and risk measurement to drive this discussion.

A good resource to learn more about the notion of Behavioral Biases is our extensive study of Predicting Behavioral Biases with Behavioral Finance.

4. Is my portfolio designed to match my risk tolerance?

Generally speaking, when identifying a person’s behavioral tendencies, you can predict how they will react to any given situation. Whether they are experiencing great success or under a great deal of pressure, using behavioral insights, you can always anticipate what their instinctual reaction will be.

Your clients’ behavioral tendencies do not change or fluctuate over time, neither will their reactions at their most stressed point. So when a global financial crisis occurs, you should not only be able to anticipate their reactions, but you should also be prepared to address their concerns in a way that aligns with their unique set of communication patterns.

You can learn more about how Financial DNA measures risk here, and the best way for you to experience it, is to try it yourself. Start your free trial today and let us see if we can pinpoint your risk behaviors and investing style.

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Your Intuitive Supplement for Online Business

Your Intuitive Supplement for Online Business

It is important for advisors to stay in regular communication with their clients in normal times but even more so in challenging times when we are forced to work remotely.

A new normal: Advisors and/or clients will not want to meet in person as often when the social distancing restrictions loosen up. Everyone has gotten used to working at home and being more physically distant.


If you’ve only met your clients a few times, how effective will you be transitioning from “face” to online meetings?

Will you be as confident in your intuitive radar, picking up a client’s emotions when interacting online?

Do you actually know enough about the client’s financial behavior and have predictive insights into their likely reactions to market movements to be able to speak to them via video links as effectively as you might have previously done in face meetings?

What do you really know about your client’s financial behavior and communication style, particularly in high pressure circumstances? What about your own style?

Not in person, not the same

From working with clients remotely since 2001, the problem I see is that, while online meeting systems like Zoom and Skype may give you a visual on the client, they will not fully tell you the truth about their feelings and reactions – wittingly or unwittingly.

Advisors often tell us their intuition in client meetings is stronger than a robust behavioral assessment tool. Nevertheless, we have always maintained that at any time, combining intuition and measurable financial behavior data is the winning formula. That approach helps ensure the “brain speak” is never wobbly and the financial behavior reporting provides consistent, reliable natural guard rails.

So, when the direct physical line to the client is cut off – it makes the use of an independently validated behavioral tool all the more important to make up for the lost opportunities to leverage intuition.

Your cheat sheet: Validated insights Here is an example of a DNA Behavior report that gives you a deep dive into both financial behavior, communication style and market reaction. Bonus: It’s delivered, in real-time, to any device you use.

Your Financial Behavior Report

Even if an advisor is confident and focused in in-person meetings, don’t assume that confidence is there on conferencing platforms and other forms of remote communication. We all react and behave differently to various forms of communication, both consciously and unconsciously. You just have to see some of the Zoom gaffes and parodies being passed around online to see this.

Just as important: Your client won’t necessarily be able to read you well or they might not present themselves to you in quite the same way when not face to face. This leads to difficulty in interpretation.

Are what clients saying corresponding to what they actually want or need? And are you relaying what you intend? Do you have the validated insights to know the difference both for you and for your client(s)?

Remote + your secret insights weapon

Conferencing platforms, social media and other means of communication are great levelers. So how do you bridge the gap and translate accurate, quality “face” conversations into this era of distancing and remote communication, using various forms of technology?

Well, you’ve got to Get Below the Surface (link to Part Two of the article), and that’s what we’ll talk about Next. Keep reading (link to Part Two of the article).

Check Yourself Before You Wreck Yourself

Check Yourself Before You Wreck Yourself

What does “Check yourself before you wreck yourself” really mean? Put simply, consider the consequences of your actions as an investor before you end up in trouble.

This pandemic is creating unprecedented disruption. Many of us are working from home. Many are feeling out of our comfort zones.

The temptation is to get online to read all the news. We read that panic is gripping the markets and suddenly we’re not watching the virus news, we’re watching our investments fall and rapidly rethinking our life plans and goals.

Your Financial Advisor Checks In

You receive a call from your well-meaning financial advisor assuring you that this virus will pass and to stay calm and leave your plans (made in more stable times, I should add) intact.

Now concern starts to rise. Your financial advisor isn’t a doctor; he doesn’t know when this virus will burn itself out. He doesn’t have a timeline on when markets will recover.

Here comes the creeping: This is where you stop yourself before you wreck yourself.

Become Behaviorally Smart

Time to meet this challenge with confidence, despite the unknown. With just an investment of 10 minutes, you can have validated insights into your financial behavior. Behavioral insights measuring virtually every communication, investing, decision-making and spending habit you inherently have.

Armed with this insight you are significantly better-placed to ward off irrational feelings and worse, foolish decisions in time of market crisis.

Your advisors mean well; they are as much a part of this uncertainty as you are. Of course, they will and should reach out to reassure you and provide you with peace of mind. But as you sit at your computer, think – you can easily manage your own reaction if you know yourself at a deeper level.

How else can you know how to respond to any suggestions or inclination of a strategy change? Maybe you should wait and benefit from a downturn. Maybe you should stick to your life goals.

Unless you know what drives your decision making you are floundering around in the dark in terms of, What’s next?

And for Advisors…

A word to any advisors reading this: You will be personally and professionally facing the same behavioral issues as your clients. You too need to know how best to tailor your advice to the individual behavioral and decision-making styles of your clients. Observations and risk profiles do not get below the surface to what drives decision-making behavior.

The risk for you is twofold. At best clients make irrational decisions for you to follow. At worst they find a new advisor.

The immediate value to you of applying Financial DNA behavioral insight to your business is what it delivers not just to you on a personal level, but also to the counsel you provide clients:

  1. Risk behavior – risk-taking and tolerance.
  2. Financial relationship management – communication style.
  3. Financial planning management – spending and saving patterns.
  4. Wealth building motivation – goal-setting propensity.
  5. Financial emotional intelligence – emotional reactions.
  6. Your Behavioral Biases – biases in making decisions.

Call to Action

My whole team is on standby to help you get to know your financial personality. Whether you are an investor or a financial advisor, take advantage of this opportunity to speak to one of my behavioral staff. Sign up for a no-cost 15-minute consultation now.

Digital key in keyhole in information security concept

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.

CEO Newsletter 2018

At the year end, looking at the year ahead…

The ever-quotable Warren Buffett says, “Never invest in a business you can’t understand.” Well, as we round out another terrific year, I want to challenge you a bit by noting that many of us regularly invest in people we may not understand. So, why make relatively blind “people investments” when you (hopefully) would not make such a financial investment?

Granted, I am a bit of a shameless evangelist for the power of validated behavioral insights, but I genuinely believe they are applicable – and I would venture imperative – across virtually any scenario, organization or industry. Harvard research tells us that 87% of business and life performance challenges are caused by behavioral differences. So, applying our proven online behavioral management solutions, may not take the number of those challenges to zero, but we can get you damn close.

One reason we can do that – in addition to our powerful products and processes – is that we have an impressive cadre of partners and colleagues who help us vet and deploy the solutions. In turn, our phenomenal clients invest in the process with us, providing valuable feedback that helps us – and them – play at a higher level. Winning is good, but a win-win is better.

It takes a (global) village

Because of those unparalleled alliances, we’re poised to not only play better in 2019, but to play bigger. Our team has discovered and embraced the book “Play Bigger”, which cleverly and clearly identifies the approach needed for positioning a company for high growth: It’s all about identifying the problem you are solving and setting your business up to be a category king (think Uber).

It is more about creativity in market positioning than directly disrupting an industry, though disruption can be the impact or part of it. Whatever work you are doing; this book is a “must read”. In fact, I am so enthusiastic about the book that I’ll commit to sending the first 18 people who respond to this (2019 will be DNA Behavior’s 18th year) the book – on me. Digital or hard-copy, your choice.

At DNA Behavior we are solving the problem of how an organization delivers meaningful customized experiences to its employees and clients on a mass scale. To do that you must know their unique style, and knowing their marketing “persona” based on demographics is not enough. Two people can have the same persona, but not the same personality. So, unless personality insights – beginning with communication insights – are integrated, you do not get there.

Meeting and exceeding the market

As we play bigger, we’ll be demonstrating, in the words of the book, what category we are king of: Online behavioral management. In 2019 we are launching our end-to-end real-time behavioral management tooling – a highly automated discovery profile debrief that is situationally dynamic. We already have this in Financial DNA with the “Market Mood” tool that integrates real-time stock market movements to behavioral style. But in 2019 we will take this further and also launch a platform for Business DNA. We can only do this now because technological developments allow us to, and the market place is demanding customization.

Thanks to you, 2018 has been a landmark year for landing major deals that implement our API strategy, through which we become the “behavioral chip” inside the tech platforms of other businesses. This helps us realize our brand promise of delivering meaningful experiences to employees and clients customized to their unique style. In particular, we have had success with large financial services firms and banks launching platforms in the employee financial wellness space. They all have very different angles and approaches – but the key point is that the online management of financial personality is here to stay and becoming a category king in its own right. This reinforces our strategy.

Validation and affirmation

We completed one of the world’s largest known behavioral finance studies looking at the financial behavior data of more than 35,000 people and how it connects to validated personality insights. The research demonstrates a high degree of alignment between the spending habits, planned giving, investing style and other behaviors to the personality style measured by DNA Behavior. We knew our system produces highly predictive results with a 91% overall reliability, this research confirms how people live it out.

Deloitte’s just-released 2019 Banking Industry Outlook also affirms our work and the path ahead we’ll be on with our banking (and other financial) partners and clients. This Big Four firm is optimistic, noting promising times ahead for banking and capital markets, as well as opportunities to double down on transformational technology, including an even better understanding and leveraging of data. We’re excited to be part of deciphering what that means to different organizations and helping them implement. (In the meantime, you may want to add this great Deloitte report to your reading list.)

We know what’s ahead; thanks for being part of it

Finally, our “why” in business is to foster people to become more self-empowered. The work noted above is a big step to achieving this “why” goal on a mass scale. We want to be part of changing the culture of business with the adoption of an Understanding People before Numbers approach. We know that, businesses of any category must do far more work in the area of culture if they are to grow on a sustainable basis. Behavioral management is just one of many components needed to build a strong culture.

Looping back to the wisdom of Warren, Buffett says, “Only when you combine sound intellect with emotional discipline do you get rational behavior.” I would posit that you also need that winning combination in order to optimize your organizational culture. So, in 2019 we will be championing the growth of culture and want all of you involved.

Let’s play bigger!

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.