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Hugh Massie Presents at Genworth: Navigating Financial Personality Risks

How are you navigating the different behavioral styles and emotions of your clients?

In this inspiring presentation, Hugh Massie shares compelling research and behavioral finance insights to illustrate how discovering your clients’ financial personality (i.e. their Financial DNA) will help them to manage the investment, financial and relationship risks that have a significant impact on their financial planning.

Financial Planning ‘in the Life Gap’

Three thoughts that could change the way your customers view risk.

When it comes to wealth management planning with clients their response might come from:

  1. The life they are living
  2. The unlived life they could be living
  3. The Life Gap in between these two.

I wonder how much potential your customers have that lies unrealized in the Life GapTM? Life Planning in the Gap, financial planning risks, financial risk behavior

  • A new business venture
  • A more radical approach to the way they currently conduct their business
  • A long laid down dream that needs finance to ignite
  • A chance to build a dream house
  • Finances to go to/return to University
  • Become a philanthropist

As an advisor, consider this thought:? what keeps intelligent, energetic, vibrant individuals from achieving their wealth building and wealth management objectives?

Some key thoughts to consider are emotional, behavioral and communication factors.

Lets look at some obstacles to building wealth that can inhibit people from taking action to achieve their financial independence and to encourage their decision making to be from knowing whats in their Life Gap and leveraging it to move them to the life they could be living.

  • Fear of not making good decisions ? how well do you know your clients? Have you any insight into what might lay dormant in their Life Gap?
  • Fear of making a bad investment - what happens if something goes wrong? Do you know their preferred communication style? How could knowing this assist you in uncovering historical information and experiences to help improve the advisory process?
  • Procrastination - when it comes to finances, they need to take an honest look at themselves and their habits to figure out what they are doing that prevents them from succeeding and realizing whats in their Gap. Do you know how to uncover such information?

In a highly competitive industry, as is the financial planning industry, success may well come from having an edge over competitors. Being able to reveal the position from which clients make their financial decisions and knowing the natural risk taking behavior is foundational because it is inherently stable over long periods of time and therefore predictable through different market events. The natural hard wired behavior will always instinctively reveal itself and take over when a person is under financial and emotional pressure. Therefore, such behavior strongly influences their decision-making. This is when they are likely to make decisions from the life they are living and close down the personal skills, opportunities, what ifs which remain unrealized in their Life Gap.

Visit the Financial DNA website and learn how to discover your clients’ risk taking behaviors in order to help them achieve their wealth building and wealth management objectives.

Keys to Developing a Client-Centric Approach

If you don’t decide strongly for yourself the favorable outcome you want out of a client/advisor relationship, your success as an advisor will likely come from others’ definition of success.

In most cases those who ask for financial advice already know the answer. Often this is based on their instinct and seeking professional advice delivers not only a confirmation but probably a measure of confidence in terms of trusting their instincts.

The measure of a strong advisor client relationship lies not in the confirmation of things already known but whether or not the advisor has the skills to take the relationship to the next level.

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

A primary responsibility of an advisor is to gain an understanding of where the client is going before deciding how to get them there. This level of connection begins the process of taking the relationship to the next level.

Investing time into understanding the journey clients are on can only be achieved if the advisor firstly understands how to communicate effectively with them. Communication is the key that unlocks closed relationships and makes a pathway for questions to be asked in a way that causes no offence and yet elicits answers that go to the heart of how a client wants to use their money.

  • what their drivers are
  • the plans they have for their lives and those of their family
  • their tolerance to risk

Perhaps more importantly such an approach opens the door to insights that inevitably allow the advisor opportunities to upsell in a non-threatening way.

Todays economic landscape is constantly evolving and as a result people are far more cautious about the advice they listen to. Clients are likely to seek advice from many sources but are far more likely to return to those whose advice is based on understanding their journey and knowing how to communicate effectively with them. This is the relationship that not only delivers success for the advisor but peace of mind for the client. A win win.

Visit the Financial DNA website to learn more about how you can develop a client-centric approach.

Financial DNA Provides All-In-One Financial Personality Reporting to include Natural Risk Behavior

For the past 12 years we have been successfully helping financial advisors all over the world know the client using independently validated? Financial DNA assessment methodologies which discover the unique make-up of their complete financial personality. Our belief is that managing the complete financial personality of the client is key to building Financial Planning Performance.Market Performance and Natural Behavior

Now, we are very pleased to announce the release of our new condensed Financial DNA Natural Behavior Summary Report which includes a specific new section on Natural Behavior Investment Portfolio Parameters. The investment parameters are directly linked to the participants level of natural behavior risk propensity and risk tolerance which we directly measure through the Financial DNA Discovery Process. This new summarized reporting makes the Financial DNA reporting far quicker and easier for financial advisors and their clients to interpret and apply in making key financial and investment decisions.

Knowing the natural risk taking behavior is foundational because it is inherently stable over long periods of time and therefore predictable through different market events. The natural behavior will always instinctively reveal itself and take over when a person is under financial and emotional pressure. Therefore, strongly influencing decision-making.

Further, we believe that understanding a clients propensity to take risks can be higher or lower than their risk tolerance for living with the consequences of taking those risks. This is very important in understanding the clients decision-making patterns and communicating with them.

*Excerpt of Natural Risk Taking Behavior section from the Financial DNA Natural Behavior Summary Report

Our belief has always been that a financial advisors role includes serving as the clients behavioral guide. This means the client must be guided away from making tragic spur of the moment decisions when there is any market turbulence. Objectively knowing the clients natural risk taking behaviors will help advisors build investment portfolios that the client can more likely remain committed to for the long term.

The problem with many risk profiling instruments is that they measure current situational risk tolerance which will change with any market fluctuation. They are not reliable predictors of client behavior and can lead to flawed decision-making if overly relied upon. We have all experienced those clients who claim to be risk takers when times are good and then suddenly become very conservative when there is a market dip. 2008 is a recent memory.

Also, we recognize pricing for advisors is important. The price of each Financial DNA Natural Behavior Summary Report has been reduced to $50 per person, or an annual unlimited usage license can be purchased for $1100 per advisor. This represents tremendous value when you recognize that we provide an all in one multi-dimensional reporting of a persons financial personality in the following 5 core areas:

  1. Natural behavior strengths, struggles and communication keys for managing decision-making
  2. Quality Life Behavioral Attitudes for goal setting
  3. Financial Planning Insights for building the financial plan
  4. Natural Behavior Investment Portfolio Parameters based on risk propensity and risk tolerance
  5. Advisor-Client Matching for relationship building

Please click here to learn more about our Financial DNA Natural Behavior Summary Report.

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