The Skeptical Questioner

This post is part 7 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 7: Skeptical Questioner

Peter Madden is 67 years old and recently retired from his chief executive role for a Fortune 1000 company. He has been around financial professionals a long time and always sees them as being out for themselves and not him. Further, he has been watching the market himself now with a Bloomberg screen in the home office. Peter thinks he can outwit the market and get in low and out high. In Peters mind, what do advisors know? Most of them do not have as much money as I do. So, he says, Why should I delegate to an advisor?
Financial Planning insights, financial advisor client, client communication styles, client behavior

Behavioral Insight
Naturally guarded and wary people will be Skeptical Questioners who seek to remain in control of their portfolio but do not easily delegate to advisors.
Communication key: Provide logical explanations and the key points in a straightforward manner.

JPeter is a Skeptical Questioner and better known as a do it yourself investor. Typically, these investors by nature will be very investigative and are independent decision-makers. You will often recognize these investors by the fact that they are very guarded in what they say and yet ask a lot of questions and expect plenty of information. Also, very often the Skeptical Questioners mindset will be that they have the capability to invest better than the professionals. However, the good news is that these investors will take responsibility for the choices that they do make.

The struggle for Skeptical Questioners is learning that they will be the ones who are in the way of their own success. They will be prone to trying to time the market and always believe they can control the outcome. The Skeptical Questioner will not find it easy to delegate to an advisor who can show them how to achieve market returns through a well-diversified portfolio. This will come only after making a lot of mistakes and realizing that they do need help. If, for some reason, they do delegate to an advisor, then watch them take back control when the expected results have not been achieved. Therefore, by trusting no one, then they cannot be really helped, regardless of their knowledge level.

Advisors who are Skeptical Questioners have the natural strength that they will be highly questioning of all information that is provided to them and check all representations made out. However, because they are by nature quite controlling and closed they will find it difficult to build trust with their clients. They will only ever be comfortable when the client completely delegates to them.

Learning Point:

The Skeptical Questioner needs the advisor to play the role of an experienced sounding board that is capable of asking insightful and wise questions to challenge their decisions. The advisor needs to learn they have to wait before being allowed into their inner world. Ask the client: How could you empower your advisors to more effectively help you? In what ways have you got in the way of your own success?

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

 

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