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X-Factor: Discovery, Awareness, Then Leadership

First published on Nasdaq


I’ve been having what I call Identity Conversations with financial advisors, industry leaders and others. It has clarified for me – and for them – that the more advisors and leaders come to understand their own identity, the better they can guide others to make more effective decisions.

John Maxwell, an author and speaker on leadership, captured the essence of this: “I have to find myself before I can lead myself. I have to be self-aware before I can be situationally aware.”

He could have written that for me and the people I work with, because he sums up an exciting truth for those of us required to guide people in their decision-making, whether as financial advisors, industry leaders, parents or others: Becoming situationally aware is itself a journey.

Situational & self

“Situational awareness” involves knowing what is going on around you and with others at any given time. As a financial advisor, situational awareness relies on your ability to see, understand and analyze the life journey of your clients and the goals they want to achieve. Life is not linear; life and market events are taking place all the time, and recognition of that is essential if you are working with clients to build wealth that also achieves their objectives.

An advisor’s pre-prepared questions can’t reveal the essence of a client. Most people are presenting their best side and perhaps even what they believe is expected. Even with well-guided questions, financial advisors rarely get to know what makes clients tick at the deeper level. Add to that the fact that advisor bias (unconscious or conscious) or assumptions also come into play.

So, the starting place is not just getting the right “discovery” tool or method to uncover what you need to know about your clients. I firmly believe you can never have real success or be a significant advisor until you genuinely discover yourself. Only by discovering your own X-Factor – those talents and qualities that set you apart and make you uniquely you – can you genuinely advise, guide and help clients build wealth to achieve life goals built on an understanding of themselves.

The secret sauce of leadership

Knowing your X-Factor, which reflects your unique gifts as an advisor, is critical to understanding your identity. That understanding, and the sharing of it, is in turn critical to understanding your clients – and helping them understand themselves.

What special “secret sauce” do you have that sets you apart in the crowd from every other advisor? This is not about your “doing” in the role as an advisor but the essence of your being. The X-Factor is found by discovering where your talents (strengths) and passions combine to drive you toward doing something that is special and differentiated.

When individuals truly discover their identity, they realize the impact it has on every choice and, of particular importance to advisors and those they serve, decision-making. They become more secure in themselves, and that fosters clearer “vision” about themselves and those they serve.

Further, when advisors understand their own and that of their clients, they understand that identity is important for personal growth and business growth. And in many cases, a business’s identity and the success of the company is strongly correlated to that of the leader’s identity.

Living your identity

In this space I’ve written a lot in the past year about taking stock of life and checking in to consider the next “season” as we begin to return to normality. This time of enforced reflection has caused many, including me, to pause and rethink their life journey.

As a reformed accountant, it’s exciting to see how the Identity Journey has impacted many financial advisors. Given that 80% of human performance comes from living your identity, managing human differences, and recognizing the emotional impulses of decision-making, a number of those I interviewed shared with me how getting in touch with their own identity made them alert to situational awareness in financial planning.

Another important realization usually follows pretty quickly: To guide clients in their complex decision-making, they too needed to go back to basics to reveal their identity, discovering how this insight shapes their situation.

Discover, then share

In time we will all forget the experience of this past year. For one, never before have we had such an opportunity to check ourselves before we wreck ourselves. To reflect and reinvent. That is, to re-assess and re-launch, with an awareness that benefits us and those around us. After all, many people search – especially now – for their place in the world and how they can live or operate with more significant meaning.

So, before you step back into whatever your new normal is going be, take a moment to ask yourself:

  • What is your future reality?
  • Who do you want to become?
  • How do you want to project yourself to others?
  • Where will your most significant impact be?
  • How are you going to stand out in the crowd?
  • Do you want a dramatic change in your life?
  • Do you want a sharp uplift in your life trajectory?

If you’re unsure of your place in the world, this process of considering your X-Factor is a great (re-)starting point. There are a number of ways to go about it, but I am understandably biased about an approach that begins with a behavioral discovery, next stepping into an identity interview.

I’m always happy to help others uncover such and will of course share my own identity interview and X-Factor “reveal.” After all, that transparency and sharing is the pivot point when the power you discover in yourself begins to help and influence others.

If you are discovering other ways to find and own your X-Factor, I’d love to hear about it.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Crucial Stock Market Takeaways from COVID-19

This last year will forever be remembered by investors for the impact of the COVID-19 pandemic. Global stocks suffered some of the quickest declines on record, and financial advisors around the world were faced with the daunting task of managing their client’s reactions to the pandemic.

If you had any discussions with your clients about Zoom (ZM), TESLA (TSLA) or, god forbid, Dogecoin, you could agree with me that there are more than a few behavioral finance lessons from the last year. In this blog post, we will cover the top 4 crucial takeaways financial advisors need to consider.

Determining Client’s Risk Behavior

Each individual has a level of comfort when it comes to taking risks, and your clients are no different. Accurately determining a client’s risk behavior canbe critical for long-term financial planning, especially during an unpredicted pandemic. When you know your client on a deeper level, you are able to create the ultimate investment portfolio. One that stands the test of time, market volatility, and global pandemics.

Evaluating Market Mood

Evaluating the current mood of the market is the most efficient way to stop your investors from making impulsive decisions that change investment positions at the wrong time. When faced with a global pandemic, the client’s inherent behaviors will take over. So if they have a tendency to make impulsive decisions, assessing the market conditions will enable you to predict such reactions and manage them. Investors typically have one of two reactions to market events. A reaction to market news they hear regarding movements of a particular index, and a reaction when they see their actual portfolio in their investment app. With the Market Mood API tool, you can measure both reactions; client-specific moods as well as moods powered by market indices.

Assessing Behavioral Biases

Each one of your clients has a set of biases that drives their decision-making process. They tend to be impulsive and lead to less optimal outcomes. Which begs the question, how can you manage your different clients’ emotions as the market changes? When it comes to the financial planning process, some clients tend to make financial decisions based on past experience and personal beliefs. Even though the goal is to make well-considered and forward-thinking decisions, our human bias inevitably gets in the way. The key is to assess their behavioral biases at the very early stages and build a portfolio structure accordingly.

Adjusting Client Communication

Client communication methods cannot be one-size-fits-all. Each investor client that you serve has preferred ways of communicating. When faced with pandemic-induced market disruption, communication is key to maintaining client relationships. Some financial advisors rely on email, others prefer in-person meetings. The truth is, similar to you, your clients have preferred communication. Being able to predict them will enhance their experience with you and develop a trusting relationship.

In conclusion

As the world resurfaces from the 2020 market disruption, now is the perfect time for you to reflect on what took place during the previous year and how your relationship with your clients has been affected. With that being said, one of our most effective tools that bridge the gap of understanding between you and your client’s behavior is our community’s power. Powered by Natural Behavior, Financial DNA pinpoints virtually every human habit: the way investors and financial advisors communicate, invest, work, and live. Start a free trial today, and find out which unique style you match with.

Customized Experiences Include Helping Investors Manage Market Fears

Customized Experiences Include Helping Investors Manage Market Fears

Before I jump into this product announcement, I would like you to know that we planned this launch months ago, long before there were hints of our current market disruption. While Market Mood does aid in managing client’s fears in volatile markets, our intention is not to attempt to capitalize on these difficult times or the concerns of investors. Stories are starting to come in from the DNA community members around the world about these trying times and we are seeing the fear and emotions that DNA measures, come to life.  The fear and emotions that investors are experiencing is real and it would be a disservice for us to make these times an opportunity for DNA. For this reason, if you feel that this tool will help your firm or aid in your ability to manage your client’s fears – we will work with you however we can by providing trials or waiving steps or fees to simplify the onboarding and get you started. 

Our team at DNA Behavior released a new behavioral finance API endpoint called the Market MoodTM API to help financial services firms measure clients’ market fear or exuberance. This Fintech tool arms them with data to behaviorally manage clients during times of market volatility.

While financial advisors have been using Market Mood since 2015, the API provides a flexible, relatively quick way for firms large and small to scale this solution.

Stopping Clients From Making Financial Mistakes

The Market Mood API measures the current level of market fear or exuberance for each investor. It also provides easy-to-understand behavioral management tips and action items for investment advisors (and Fintech applications) to behaviorally manage or “nudge” their clients, in a way that is tailored to each client via automated customization.

Research affirms that investment advisors bring the most value to clients by stopping them from making impulsive decisions that change investment positions at the wrong time. Our own research tells us that, in typical market conditions, using Market Mood can help advisors bring an additional 150 bps to investors; however, in adverse volatility, this can increase to higher amounts.

Like all DNA Behavior tools, Market Mood helps individuals easily (and practically) apply behavior to create customized experiences. In this case, advisors & Fintech apps customize the experience for investors, easily using behavioral finance nudging techniques (traditionally only addressed in advanced textbooks and research papers).

Investor clients typically have one of two reactions to market events. A reaction to market news they hear regarding movements of a particular index, such as the S&P 500, and a reaction when they see their actual portfolio in their investment app. With the Market Mood API, we help firms measure both reactions; the API measures client-specific Moods as well as Moods powered by market indices.

Nearly Each Clients Will Have a Different Reaction to the Same Market Event

It’s logical that clients will react differently to the same market events, but traditionally, firms and advisors treat each client the same when markets are volatile. With recent market shifts caused by events such as the China trade talks, Brexit, and now the coronavirus outbreak, some investors are opportunistic when the markets are down, and others are fearful.

In sharing his experience, Shay Woodward of Performance Wealth says that, “Market Mood is a new way of thinking about and looking at my DNA Client Data and how clients will react to the stock market. The communication cues and tips provide a structured approach to engaging with my clients. I continue to find better ways to engage with my clients using Market Mood.”

Market Moods Clients May Have

There are eight different Market Moods, represented with four colors to easily demonstrate the level of urgency for financial services teams.

Market Moods, when investment returns are positive:

  • Comfortable
  • Exuberant
  • Watchful
  • Apprehensive

Market Moods, when investment returns are negative:

  • Comfortable
  • Opportunistic
  • Concerned
  • Fearful

Learn more about Market Mood: Download the Market Mood Brochure

Market Mood API Documentation

Bruising Times for The Markets

Bruising Times for The Markets

Uncertainty is the defining characteristic of the world we are in today. Trying to understand and compete in volatile markets can feel very confusing. Emotions will swing.

Those investors who always assume they are in control start to wobble as they see blows coming from all directions. And investors who rely heavily on their advisors to steer them could well be dealing with an advisor who is shaking and going through emotional swings of their own. However, investors and advisors who are behaviorally smart – that is, they know at a deep level their financial approach and reaction to markets – will survive this season.

Surviving the current market

Facing an economic meltdown, investors that ride out this tide of uncertainty are the ones who are behaviorally smart. Not because they hold impressive degrees, though they might, but because their greatest investment was the 10 minutes they spent getting to understand their hard-wired financial personality.

Yes, they may be required to manage the fear creeping into their family unit, but they themselves are confident in the decisions they have and will make as the world rocks. They know how to keep their heads and trust the decisions they made in more stable times.

They understand that life goals matter, markets will recover, and in every crisis staying cool and true to your inherent financial personality means you can see opportunities that market lows present.

Financial personality revealed

So, what will be revealed if you take time out from your home isolation to complete the Financial DNA Natural Behavior Discovery?

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

And so much more.

We are committed to helping you answer these tricky behavioral questions and helping you to understand your financial personality, especially during these tumultuous times we are sharing.

I’ve put my teams on standby as a service to the financial industry to do all we can to help you manage your financial behavior. To start, consider these offers:

Mainly, be well and be safe.