3 Ways to Prepare for the Behavioral Awareness Movement

More financial services firms are starting to join the behavioral awareness movement.? Why?

Behavioral theories now have proven hard-edged results. By engaging clients on their terms, financial services firms can increase revenues and manage their compliance risks.

behavioral finance, behavioral awarenessWhat can you DO to help your advisors become behaviorally smart?

1. Give your advisors bigger behavioral data

93.6% of financial planning is behavioral management of the client. As described in What Drives Your Financial Decisions, an advisor needs to know deeper traits of the client such as personality style, emotions, listening style, communication preferences, confidence level and desire to control.? And, this behavioral data needs to be at the fingertips (via CRM) of the advisor and their staff.

2. Provide a client engagement solution for your advisors

In a recent survey by Practical Perspectives, one of the top topics of interest to advisors is client development and engagement.? Advisors are not interested only in theory.? What they really want is a program that is actionable and implementation-oriented.

3. Lead by example with your advisors

Does every employee that interacts with your clients know their communication preferences and behavioral style?? Research shows a 40% decrease in repeat calls when a call center rep tailored their response to match the unique personality of the caller (client).

Isnt it time to recognize individual differences and become behaviorally smart?

Discover the action steps to take now at

How it Works, DNA Behavior, behavioral consulting, psychometric testing

Uncovering the Advisory Blind Spot

Dictionary meaning: blind spot a subject that you do not understand well, often because you do not want to know or admit the truth about it.

Most clients have a blind spot when it comes to financial management; but equally most advisors have a blind spot about who their clients are. The advisor often believes he or she can read people but it is natural the advisor will not be able to get a complete and objective understanding of the client regardless of their intuition or level of experience. Uncovering these blind spots has two powerful outcomes in the financial advisory process.

Advisory Blind Spots, Behavioral Finance, Financial PersonalityFirstly, for an advisor it increases their understanding of the importance of asking clients the right questions. Getting to know how clients are financially wired is a key to building relationships. Secondly, it uncovers the need for advisors to acquire skills that assist them to understand different client communication styles and how to use that knowledge to moderate/adjust communication styles to draw out information about clients financial behavior and decision making patterns, and from there adapt advice to better meet their needs.

The challenge for clients is that they dont know what they dont know and this leads to blind spots. They may well not be able to see opportunities in risk nor risk in opportunities, and advisors need to be able to expose these blind spots and the possible history behind them. Being able to discover their future plans, their aspirations, their background and what has driven or influenced where they want to go in terms of wealth management ensures that advisors give targeted advice that will undoubtedly build stronger client/advisor relationships.

Sarah and Michael recently engaged to be married decided to speak to a financial advisor about planning their financial future. The advisor encouraged them to save and invest; to work towards owning their own property and gave them reading material to support the advice.

Sarah and Michael left confused and dissatisfied. They had wanted to talk about handling money responsibly; they wanted to ask questions about separate or joint accounts; they wanted to start a college fund for the future education of their hoped for children; they wanted to avoid debt but use and manage credit sensibly; they wanted to ask about a self-managed pension scheme; they wanted to share their dreams for the future and how they could build wealth to enable them to realize them.

Did the advisor give advice? Yes. Did the advisor uncover anything significant about these two potential clients? No. Had time been invested into asking questions, discovering their financial personality style uncovering their history, revealing any blind spots ? the advisor would have discovered that Sarahs parents divorced after mismanagement of finances that led to bankruptcy and she was determined that this should not happen to her but knew she had many concerns about never taking any risk with finances. Michael came from a long line of financially astute family members. As a family they openly discussed finances and understood the importance of encouraging the younger members to do likewise.? Michaels family through careful management had built up a significant wealth. the advisor been behaviorally smart; had they objectively known the different behavioral styles and emotions of these clients which comes from using a formal behavioural discovery process; had the advisor been equipped to navigate human differences by discovering and aligning how to uncover different communication styles, behaviors, solution preferences and blind spots this story would have had a happier ending. As it was Sarah and Michael took their business elsewhere.

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

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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

Advisers Probe Clients’ Financial Personalities

A recent article from The Wall Street Journal describes how Advisers are using Financial DNA to figure out their clients’ behavioral-finance types and how best to communicate with each one.

“Just as some advisers segment clients by asset level or some other metric to determine what level or types of service they need, advisers like Ms. Surratt classify clients based on their personalities to figure out more effective ways to interact with them.”? – THOMAS COYLE, The Wall Street Journal

Read the full article here

The One Thing Women Really Want

Youve read all the reasons why targeting women as clients is lucrative.? They control a lot of money, make the family financial decisions, are more loyal, and refer you more business.? You know what the potential is for your practice.

But what is the one thing that women really want from YOU, the financial advisor?

The same thing as menTRUST.? Easier said than done.

A recent MetLife study at the nonprofit Womens Institute for a Secure Retirement found that 61% of women executives (earnings of at least $75,000 annually) cite trust and respect as the most important factor in choosing and keeping a financial advisor.

As a financial advisor, you envision yourself as a relationship expert, being able to easily identify personality traits with the well-crafted questions asked in your initial consultation.? While you may be highly intuitive, you will only be guessing about your conclusions by using this random hit or miss strategy.? Research shows you only naturally connect with roughly 40% of your clients.

financial planning for women, working with clients, women in financeBuilding trust is most effortless when your communication style is matched with a similar style of a potential client. If you are the opposite style, you can still build trust but it will take a lot of modification and you will find yourself being drained by the relationship.

So how do you build trust with women? 84% of wealthy women interviewed by Schwab said that in-person meetings are key for establishing trust.? The research also adds that, women want to be understood for their unique circumstances. You cant just walk in with the same package for male clients and change the font to pink and think the women are going to be fooled.

Building trust starts with knowing YOU first. Your behavior is the foundation for you to tailor your strategies with women.? How trusting are you?? Do you need to be in control at all times?? Are you a natural listener or can you hardly wait to complete someone elses sentence?

Next, you need to understand the behavior of each individual woman. They (like men) are not all the same.? Some women will want to be in total control, get to the bottom line quickly and will want to engage in minimal personal small talk. Others will want to build a deep relationship, talk a lot, and care very little for the details of your business.

When you are equipped with behavioral information you can then create the marketing approach that best attracts the type of woman you want as a client. So take our industrys advice about marketing to women by educating, moving to a relationship based model and getting personal through stories. But be sure to create unique experiences based on who these women are.? Customization is the new normal.

Dare to go one step further to build the level of trust that will keep women as clients for life.?? Find out more on how to understand and unlock the potential of female clients at:

The Pioneering Goal Driver

This post is part 8 of our 10 part series on Financial Behavioral Insights from our Financial Planning 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 8: Pioneering Goal Driver

Anna Summer is a 45-year-old executive who leads the sales team for a large international foods company. To Anna, being wealthy and seen as professionally and financially successful is important. In the early meetings with the financial advisor, Anna communicated her goals and asked that the advisor keep her on track to meet them. Coming with her driving approach are significant financial goals and a lifestyle that has to be maintained. Anna did say that now that she has found her passions in business and life, her competitive drive has become relentless.

Financial Planning insights, financial advisor client, client communication styles, client behavior

Behavioral Insight
Naturally ambitious and driven people will be Pioneering Goal Drivers who are focused on growing their wealth but may be overly focused on success.
Communication key: Address their goals and remember their need for quick action.

Anna is the typical Pioneering Goal Driver who has big goals that need to be achieved in a hurry. She is naturally ambitious and determined to reach higher levels of success. So long as a Pioneering Goal Driver can see the goal is viable and there are signs of success, they will keep on going and may even increase their intensity toward the goal. From an investment perspective they can set long-term goals, and they will keep with the strategy so long as progress is being made. They usually will not make emotional decisions that ruin any progress that has been made.

The struggle for a Pioneering Goal Driver is that they are not going to be a content person satisfied to take the more lifestyle balanced life option. They will always be striving to make their life better. Therefore, they could sacrifice too much for success.

The reality is that most people have goals of some sort that they want to pursue. The question becomes, Can a person who expresses a desire to achieve big goals do what is needed over the long term to achieve those goals when the going gets tough? Not all people can, although they may think they can. Will they be persistent enough to follow through and make the necessary life change and accept the bumps on the road? Again, this can be difficult as there will always be many factors competing for attention and self-doubt that can creep in.

Advisors who are Pioneering Goal Drivers will naturally be focused on helping their clients set and achieve goals. However, they will need to realize that not all clients will be goal focused in the same way. Some clients will be very driven and results focused and others only want enough for their lifestyle needs.

Learning Point: The Pioneering Goal Driver needs to be questioned by the advisor in depth on the realism of their goals and deep-down desire to diligently achieve them. Then they need to be guided to set a concrete plan of action. Ask the client: Tell me about how you are progressing towards achieving your goals? How important for you is it to be seen as financially successful?

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