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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.

Transform Your Client Experience to Grow

For advisors, growing your financial planning business is about getting more of the right clients who you can profitably serve on a sustained basis. This means you must have financial planning clients who will pay for the value you provide and will allow you to do so efficiently and with minimum wasted energy. I am sure this sounds logical and for many financial advisors this will sound obvious. The question is: are you acquiring clients and managing relationships as well as you can?

Creating the right client acquisition plan does not just happen and normally you need to have been in business at least 5 years to be in a place to work out is right. Experience is needed. One starting place to getting the right plan in place will be performing a financial analysis of your business to determine the profitability of your client relationships. In my experience, it will not always be your highest fee paying clients who are the best clients to have.

However, I would seriously recommend in building your client acquisition plan that you consider the client experience being provided. Remember, we are in an experience economy. Transforming the client experience you wish to provide is the key to growing your business and also your revenue. This is where the perceived value will come from. The starting point for this transformation process is with YOU personally understanding who you are, your Financial DNA personality and your life purpose. Consider:

  • What are your talents and unique gifts?
  • What are you passionate about?
  • What are your own life and financial motivations?
  • Where could you make the most difference in the life of your clients?
  • How do you wish your service to be remembered?
  • How will you differentiate your service?
  • What capabilities do you have to develop?
  • What processes do you have to build?
  • What will the profile of the desired clients be?

THEN, address what fees you need to charge to profitably deliver this service experience, and the fee charging model. From this platform you can determine your client selection policy and the ideal practice for you.

For you to be successful in creating an experience your service must create feelings. The client must feel that who they are is understood along with their life. Further, your clients must feel that they are making the right life, financial and investment choices. So, your client service experience must have a greater “inside out” feeling and hence methodology to it. This is not just connecting with the client on an inside-out basis up-front to build the plan. The inside-out experience must be continually provided every year through the review meetings and in every communication. You will only achieve this by creating a service model that is authentically connected to the core of who you are and also the core of who your clients are.

Fundamental to the approach I have been using for the last 10 years is to have all of my clients complete a Financial DNA personality test up-front in the planning process. This creates the feeling of being understood. The feelings of understanding and trust are accelerated when the client sees my own Financial DNA personality profile. This now makes us more equal and shows I have walked the journey too. From here, I build the whole planning experience tailored to who the client is so that they can make the right choices.

To learn more about Financial DNA and building the “Ideal DNA Advisory Practice” visit:

Partnerships and Money Personalities

In the past few weeks we have had a number of people contact us who are starting some form of business partnership together. Most of the time their request has been to find out more about their differences. Some of the typical issues they are seeking to understand are:

1. What are our different talents?
2. What should our role in the business be?
3. What areas do we have to watch out for?
4. Do we have shared values and purpose?
5. Who else should we hire?
6. How do we communicate with each other?
7. How do we hold each other accountable?

These are all very important questions and it is important they are always addressed in structuring and managing a partnership.

However, there is another dimension that needs to be understood and is seldom directly addressed. That is the influence of different money personalities.

1. What are the different money personalities of each of the partners?
2. What is each partner’s different relationship to money?

In essence, we need to know their DNA Behavior. How will each partner behave with money based on their financial behavioral style? This is absolutely critical to the success of the partnership. So often partnerships do not work or certainly fail to reach their potential because of the different financial attitudes. The different financial attitudes will have a large bearing on their respective goals, what each wants from the business, how they will handle money in the business, how the business is financed and the business development plans. You will even find the financial attitudes of the spouses will be important as this is another partnership to which each of the business partners is accountable and is strongly influenced by.

If one partner is more dominant, then his or her financial attitude will prevail and have a strong influence on the outcome of the business and the decisions. It is my experience from working with many partnerships, and first hand from being in partnerships, that each partner having a healthy relationship to money will be foundational to success. Just have a look at some partnerships that you know of that have worked and failed. Ask why? Money is nearly always there in a big way. Do not be afraid to find out the answers early as this will save a lot of pain later. This is important as having shared values and knowing your respective talents. If not understood, it will become a major road block.