CRM has traditionally stood for “Customer Relationship Management” system but with new FINRA regulatory requirements and mounds of risks to manage, we are starting to see a shift, particularly with Broker Dealers and CRM is starting to have a much different meaning- Compliance Regulatory Machine.

New FINRA Rule 2111 requires Broker Dealers to take a closer look at the investment advice that advisors are providing their clients. These rules coupled with potential holes in the documentation processes between advisors and Broker Dealers present a huge opportunity for CRM’s and Business Apps to close this gap.

FINRA Rule 2111 requires, in part, that a broker-dealer or associated person “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer’s investment profile.” In general, a customer’s investment profile would include the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs and risk tolerance.

Broker Dealers are now required to do their due diligence in regards to the investment suitability that their advisors are recommending for the investor clients. This suitability is determined based on a series of 9 parameters that FINRA has recommended as important such as client age, financial circumstances and risk tolerance. This entirely new regulation is a very daunting task for Broker Dealers when you figure the amount of data that is required to determine this suitability and the means that Broker Dealers currently have to collect it.

There are an estimated 150 million+ individual investors in the United States, 9 parameters that FINRA recommends the Broker Dealers should consider and that the majority of advisors are housing their data and technology independent from their Broker Dealer. This shift will require CRM’s to adopt slick, interconnected technology platforms for managing compliance which include business apps for vendors across the board.

We believe it is a step in the right direction that one of the 9 parameters the FINRA Rule 2111 recommends for reviewing product suitability is risk tolerance. This means risk tolerance will have to be quantifiably measured and documented in the financial planning process. Therefore, the traditional approach of  advisors asking the question to the client: “What is your tolerance to risk?” will not suffice for this measurement. Not only is this method not properly capable of documentation but it also is now proven that this type of question is heavily biased based on the advisors intuition and cannot be properly measured. The days for advisors of making intuitive assessments of a client’s risk tolerance based on their perception of the clients factual position and representations made during discussions are over. There is no room for advisor or client blind spots getting in the way.

What this means is that advisors will be obligated to start deploying validated systems that objectively measure risk tolerance on a highly reliable basis. Then the advisor will need to have systems for linking the risk tolerance to the suitability of investments. Further, they will need to have processes for monitoring that suitability on a long term basis and documenting it for compliance.

The FINRA Rule 2111 does not define risk tolerance. This will bring us to the next issue as to what is it and how is it measured. Whilst some people think that the term risk tolerance is clear because it is commonly used the fact is it is not. Does it mean a person’s propensity to take risk or capability to emotionally accept losses? These are different behaviors. Then comes the broader issue that knowing the risk tolerance of the client is of itself not enough to make suitable investment recommendations. This is because risk tolerance does not cover the broader behavioral biases of the client and advisor which will impact the suitability of recommendations. For instance, the “Newness Bias”, “Benchmarking Bias”, “Pattern Bias”, “Optimism Bias” etc. So, advisors thinking they can hide behind any risk tolerance tool with a “tick in the box” may be fooling themselves. The UK regulator (Financial Conduct Authority) is taking this broader approach.

The implication of the need to take account of these broader behavioral biases up-front when initially making recommendations and then monitoring them is huge for the Compliance Regulatory Machine. We are certain that this means the future of behavioral systems which reliably predict all of the behavioral biases of the clients and advisors (to mitigate the impact of advisor blind spots) is very bright and almost guarantees a place in this compliance regulation.

In the 21st Century we all use apps to get things done and even if it takes 5-10-15 more years, the same will go for Broker Dealers with their compliance regulations. This is where we see the future for compliance regulation and how behavioral discovery systems  will fit in. With the modern enterprise CRM’s, Broker Dealers will have a greater opportunity to more robustly monitor the activity of the advisors without getting in their way. All advisors will be on the same platform that are interconnected and operate in real time.

Let’s take a quick look at how our DNA Behavior discovery systems will soon take a leap forward in this next gen revolution. We have built Financial DNA apps for the Salesforce and Redtail CRM’s- two of the most widely used CRM’s for financial services, with others proposed in the near future. By utilizing a web like architecture that these CRM’s provide, the Financial DNA app will be able to speak to other financial planning apps maintained by the advisor.

This is how heavy compliance regulations can be displayed visually for the advisor to follow and understand.

The above figure depicts a scenario recognized as Not Compliant with our mock compliance CRM app. This app puts Risk Tolerance, Calculated Financial Circumstances and Portfolio information in one screen- that’s easy to use.

In the above example an advisor is using 3 apps inside their CRM to monitor compliance: Financial DNA, Morningstar and a custom compliance app the advisor’s Broker Dealer has built to measure the client’s financial circumstances. The independently validated Financial DNA app states the behavioral level of risk that the client is naturally comfortable taking is Below Average, The Broker Dealer compliance app says that the client can afford to take Average risk and Morningstar has rated the current portfolio risk level at Above Average. We see this scenario time and time again when working with advisors. Other methods of measuring risk tolerance are often flawed, or non-existent, and not capable of proper documentation- because of this, the clients are invested in too much risk for their preference level. When investments start to decline, the clients become uncomfortable and stressed and leave the advisor’s watch. Now, with this new FINRA regulation, not using a validated instrument for measuring investment risk tolerance, and possibly other behavioral biases  is not just a matter of lost client engagement for the advisor (and hence revenue), but also a substantial legal liability for Broker Dealers and advisors.

For additional information, visit the Financial DNA website or contact inquries@dnabehavior.com.

Try Financial DNA free for 30 days!

Sadly, generally speaking, not all financial advisors are fully committed to exploring your hopes and dreams and then matching your financial plans to deliver those expected life experiences. It’s not their fault, they are often young and inexperienced in the ways of life or have not embraced their own life journey yet, and they are obligated to sell you products determined by the company they are employed by.

As a client what can you do to change the way your financial advisor works with you in order to meet your unique needs? What can you do as a client to move the relationship to a level that puts you in the driving seat and educates/helps your advisor to spend more time investing into you, your financial behavior, your plans and your dreams?

At the outset it’s important to understand that your financial advisor may be completely resistant to the thought of understanding your behavioral approach to your finances (other than your ability to manage risk). But equally important is to know that the financial industry is changing – more and more attention is being paid to how to increase business and retain clients through changing the behavior of the industries advisors.

So here are some keys to changing the client/advisor relationship:

1. Research what the financial advisory company is saying about itself. Look at websites, marketing material; listen to executives recorded messages: look for the types of phrases listed below and ask the question – what will you do to deliver this statement in terms of the financial advice you propose to give to me?
   - tailored client advisory service
   -the best possible expert advice for your situation
   -exceed their clients’ expectations (do they know/understand your expectations?)
   -advisers will help identify exactly what you require to meet your needs and achieve your goals (how?)
2. Understand your own risk attitudes. Be clear about what you really think ‘risk’ means to you. This self-awareness will help you to navigate the ‘risk’ conversations more effectively and will ultimately deliver a greater level of success in the relationship.
3. Encourage the advisor to ask leading questions. Prompt them. For example:
   -Would you like to know about a significant financial experience in my life? (this might refer to a financial loss, a financial gain or seeing something similar happen to a family member)
   -Would you like to know about three noteworthy plans I have that have not as yet come to fruition.
   -Can I tell you about proposals my children have for paying for their education?

There is, of course, no guarantee that your advisor will adjust their performance to embrace a more behaviorally based advisory relationship with you, but at this juncture the next question that you should be asking is this: – do I really want to continue to give my business to a financial advisory company who cares more about product sales than the plans I have that I trust will prosper me and give me and my family not only a good life but help us to deliver the hopes and dreams we have?

To learn more about developing financial behavior awareness, please visit the Financial DNA website.

Try Financial DNA free for 30 days!

In raising these “blind spots” we fully recognize that there is an inherent tension between enhancing client engagement, which boosts revenues, and compliance, which protects the business. Our recently released “Blind Spots in the Financial Advice Process” white paper serves to highlight these “blind spots” that your firm should be aware of, and then recommended actions to consider.

Where are the blind-spots in your firm’s current advisory process causing this gap?

Read the Executive Summary to the White Paper

Download the Blind Spots in the Financial Advice Process White Paper

J.D. Powers and Associates just released the results of a survey that found 31% of financial advisors were “indifferent” about their work and have no strong attachment to their firms.  Without a connection to their firm, these advisors are likely to be open to discussions with competitors.

There is a silent killer lurking in the midst of our organizations. Could a third of your clients be classified as “indifferent”?

One of the biggest challenges with identifying indifference is that we usually judge our clients through our own viewing lens.  That is not always objective. Or we point to our annual client surveys.  But there is a risk that you can have lots of data and not see what it is saying.

Indifference can translate into business risks.  The first is that the client will not stick to their financial plan and that will present problems for you in the form of difficult conversations and unrealized goals.  In addition, the client will not add money to their account or provide any referrals.  Finally, the client is open to conversations with other advisors and the ultimate risk is losing the entire relationship.

What can you do to combat the silent killer?  Start by asking a lot of questions to get beneath the surface of a client. Human differences are really the hidden obstacles in any relationship.  It takes time but you will uncover the behavior and emotions that lead to authentic engagement.  Next, be sure to adapt your communication style to that of your client. You might be excited about sharing all the market data when in reality your client is happy with the concrete, bottom line results. Finally, customize your products and services to your client.  A lengthy newsletter is not necessary to clients who prefer picture, graphs and bullet points.

All of these recommendations may seem small. But small changes produce big results.   Keep in mind that it is in understanding behavior that leads to customer engagement.  When your clients are connecting with your firm at a deeper level, there is no room for indifference.

Learn how you can objectively uncover and navigate the different financial personalities of your clients by visiting the Financial DNA website.

Now, behavioral finance has been given a significantly increased level of importance at a practical level with the UK regulator publicly expressing its views. In this regard, the Financial Conduct Authority in the UK has recently issued Occasional Paper No. 1: Applying behavioural economics at the Financial Conduct Authority – Click here to view the paper.

Clearly, this paper signifies that the UK regulator will be taking a greater behavioral finance direction in its overseeing of financial services. The subject of human behavior in financial services can now progress past investment risk profiling to knowing all of the behavioral biases that a consumer has in making financial choices, and relating those to product suitability.

The paper details the need for advisors to get deeper into the minds of consumers for helping them manage their behavioral biases to reduce mistakes and also mitigate the mismatch between a products declared function and the consumers actual use. More specifically it points out how advisors and clients are mostly blind to their biases and mistakenly trust their intuitions. Even advisors familiar with different type of biases find it difficult to spot how their biases affect a particular decision. In effect, the paper highlights the need for understanding the broader financial personality at a deeper level which is the inherent foundation of Financial DNA. This goes beyond the traditional risk profile which is singular in nature.

The question is how long will it before other regulatory authorities go down a similar path? Given the increased focus of regulators around the world on product suitability it may not be that long. The UK regulator in the past few years has been a clear leader with others looking to what they do.

What does this mean for advisory firms? In essence, firms will have to revisit their advisory processes particularly in the area of knowing the clients behavior. There are existing regulations and compliance obligations for knowing the client and product suitability. However, firms will have to do a lot more in their discovery work in the future to meet what will be increasing regulation and oversight in this area. Perhaps, it is time for firms to start preparing now? Our experience, is that firms who provide a great discovery experience are able to enhance client engagement. So, whilst the behavioral approach of the regulator may seem like a burden it can be converted to a sustainable revenue opportunity through greater client engagement.

To learn more about how the different behavioral biases of each investor and advisor can be discovered using an independently validated process, please visit the Financial DNA website.

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.

]]> http://www.dnabehavior.com/blog/financial-personality/navigating-financial-personality-risks/feed/ 0 http://www.dnabehavior.com/blog/communication/3-keys-to-get-you-ahead-of-your-competitors/ http://www.dnabehavior.com/blog/communication/3-keys-to-get-you-ahead-of-your-competitors/#comments Thu, 11 Apr 2013 17:15:30 +0000 Carol Pocklington - Customer Behavior Research at DNA Behavior International http://www.dnabehavior.com/blog/?p=1904 Do you feel as though you are always running to catch up?  Here are 3 Keys to get you ahead of your competitors.

Advisors want to deliver excellent advice, they want to see satisfied clients, and they work hard to inform themselves to be able to give this level of service.

Often they are running to catch up with the latest social media, latest gizmo, the latest must read book that remains sitting on the night stand unopened for months, the latest financial industry guru declaring how best advise clients? All very frustrating and unfulfilling but more importantly, unproductive.

So what is the answer to becoming a behaviorally smart advisor?

• It is all about navigating human differences to match the advisor to the client and provide appropriate solutions for them.
• It is all about uncovering all of who a person is
• It is about knowing who your competitors are AND what they have to offer

Some simple thought provokers:

• Have a conversation with your clients, forget about advising or selling for a short while – just converse
• Share something of your story, it will be relaxing and it’ll encourage them to talk. As the advisor, you are the leader: “leaders go first”
• Many people often won’t initiate sharing something personal, but are far more likely to do so in response to someone sharing some of their story first
• Listen for clues, watch for reaction, understanding their needs and values
• You are now building trust – you are now laying foundations upon which to match a product /advice

3 Keys:

1. Uncover. Use conversation to build trust by identifying the human behaviors which lead to the differences in your style with the client and within family groups. This will remove the hidden obstacles, and build more confidence in the advice you give.
2. Navigate. Understand the power of the written, spoken, visual word and make sure the client hears/understands the message.  If you understand your clients’ communication keys, that’s brilliant, but if not focus on the cues provided to you, then you can navigate them through your message/s.
3. Match. If you are part of a larger group, use this information to match advisor to clients to more easily gain  deeper levels of engagement. If you are in a small practice look for ways you can adapt your approach to match the client’s needs.  Add an additional ingredient by ensuring you as the advisor and your client have shared values.  Non-aligned values produce poor results.

For more information on how you can Uncover, Navigate and Match to build sustainable business performance, visit the Financial DNA website.

Try Financial DNA free for 30 days!

Helping your clients plan for retirement requires you to use a “whole brain” approach to financial planning.  Consider these facts recently released by the Employee Benefit Research Institute: 57% of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes.  28% of Americans have no confidence they will have enough money to retire comfortably.

Beginning with the left-brain side of the business, you are already starting with a deficit: a lack of money and confidence.  Pre-retired couples assemble their budgets and that action alone can bring on a lot of uncertainty. Like the markets, people don’t like uncertainty. How does it feel to live on the withdrawal side when your clients have always lived in the accumulation phase?  What about the possibility of another Great Recession?  Are health care costs really that high?  How do I know how much to plan for home repairs?

That left-brain conversation can take a sharp turn into the right-brain hemisphere.  A client may confide in you that even though they never liked their job, at least it gives them a sense of purpose. The reality is that when people don’t feel they are doing something meaningful, they become bored and pessimistic. Failure to address things like how much time they will spend together, changes in household responsibilities if one retires before the other, or how their golden years will be affected by financial issues such as supporting an aging parent can quickly remove the luster and shine from their golden years. Couples can, and probably will, have different priorities and attitudes about retirement and that identifying those differences is critically important to their compatibility, and success in retirement.

The emotional side of retirement coupled with the numbers side can add up to stressful conversations during your meetings with pre-retired clients.

So how do you continue to create a priceless unique experience for your pre-retired clients?

By understanding where to focus the conversation depending on the type of client sitting in front of you.  If your client is primarily a goal-setter, then helping them with ideas to redirect their time, energy and talents into new ventures will help reduce the tension.  An information seeker will need more details and research on retirement ideas and will probably be more at ease with identifying and following detailed cash flow projections.  Your client who is more lifestyle oriented would do better with you telling stories about your other retired clients who have successfully made that transition. And, finally, a security seeking client’s mind will be at ease when you combine both their feelings and very concrete, specific ideas about retirement.

Helping your clients prepare for retirement requires you to move from the client’s outer world to their inner world with grace and ease.  Instilling confidence and a sense of certainty in these uncertain times is your number one priority.  And to do that, you need to have a heightened self -awareness to show both your logical, and emotional side.  Your payoff is loyal clients who will stay with you and provide referrals for life.

For more information on how you can determine the financial personality of your clients to guide them in all financial planning conversations, visit the Financial DNA website.

In the investment arena, many clients find stock markets and matters such as asset allocation and volatility complex or even scary. A common experience of most investment advisers is that even when the client confirms verbally that they understood an investment concept that has just been explained to them, true understanding usually requires the explanation to be repeated several times before the issue is grasped.

In order to simplify matters, many investment advisers have, by and large, focused historically on fund selection and objective matching. While this is understandable to a certain extent, it is also dilutes the skill necessary to advise clients and risks falling into the trap of letting investment advice be led by the most convenient product or “off the shelf” fund being marketed by an investment manager. Hindsight is wonderful, but replicating the investment choices that have performed best in the recent past does not guarantee future success. This lemming-like behaviour has led to housing bubbles and the dot.com crash, to name but two. Simplification can also lead to oversights such as a failure to recognise the impact of inflation or the effect of taxation on investment growth.

Any document dealing with investment risk needs to acknowledge the trade off between investment return and the possibility of loss together with ongoing volatility, especially with asset classes that experience wide variations in pricing. While the concept of the Efficient Frontier is a familiar one with experienced investment advisers, many clients interpret the drawing of such a graph as almost a guaranteed level of performance without realising that losses can and do occur.

Risk profiling is possibly the single most important regulatory issue facing investment advisers and financial institutions at this time, as the consequences of getting it wrong or even not doing it can be severe for both investor and adviser. Getting it right confers major benefits, for example, by allowing diversification to dilute risk or identifying when to stretch investors to go beyond their usual comfort zone and take slightly more risk needed to meet goals.

In recent years, especially in the UK, there has been a steady growth in advisers’ use of investor risk profiling tools provided by investment companies. These alone, however, are not silver bullets for defining risk, despite the encouragement by such companies who have a vested interest in providing the shortest possible route to a client selecting their investment funds. All of this assumes, of course, that these profiling systems have been constructed correctly and are properly validated.

The traditional understanding of risk is, however, only half the picture. By solely focusing on investment return, investors and their advisers ignore the reason for investment return, namely the satisfying of a need for capital growth. Such a need is based around a future requirement for expenses to be met, especially those that are based in the reality of current needs. This also means that a client’s current financial behaviour needs to be addressed. Such behaviours include blind purchasing by clients of financial products other than investments as well as overreaching in borrowings. Similarly, spendthrift behaviour merely because cashflow is available is not a sustainable long term financial behaviour. Nevertheless, not only can clients lose the run of themselves but advisers who fail to advise these clients otherwise could lead to such behaviour being interpreted as acceptable and in some way a part of their future financial planning approach.

The spectre of financial risk is also present in the need to purchase life assurance, income protection or specified illness cover. Maintaining these safeguards requires that a person remain solvent and have access to cash, both of which can be influenced by arbitrary decisions on the part of the individual, many of which are emotionally driven.

The acknowledgement of risks other than the traditional views of investment risk is key to good financial planning. Even more important is the education of clients in such regard. Individuals can, and do, become blinded to the possibility of future financial loss due to steep rises in interest rates on large loan portfolios in periods of economic success. Similarly, a lifestyle that has been funded by the existence of easy credit through credit cards, overdrafts or interest-only borrowings has led, post-Lehmans and other similar circumstances, to personal financial destruction. If financial education is only acquired through personal losses in the troughs of economic cycles rather than through an understanding of these cycles and a long-term perspective, the possibility of financial recovery may be rather slim.

What financial planners need to recognise is that they are primarily investor managers as opposed to investment managers and client leaders rather than product sellers. Such leadership has been severely lacking as, in many instances in the past, advisers sought to take shortcuts to generate business income without necessarily examining the true emotional makeup of their clients and the financial impact of such clients’ natural preferences in dealing with money. This misdirected advice has, in turn, had serious consequences on the long-term relationship with the clients.

In fairness, the financial services industry has historically veered towards defining and managing risk as being investment related. Such an approach was easy to rationalise, and led to the design of easily marketable products which suited those businesses that relied on earnings from annual management charges from investment funds.

The realms of individual financial planning do not, unfortunately, fit easily into systemised investment marketing and, traditionally, what does not fit is usually ignored for the sake of profitable expediency. To be an excellent financial planner not only requires product knowledge and an ability to analyse but also a willingness to spend more time getting to know the client, which leads to an understanding of and empathy for the client, rather than focussing on the quick sale.

While “knowing the client” is a prerequisite by any financial regulatory code, too few advisers take the trouble to know the client from the inside out since to do so takes time and may create additional workload. Rather than looking at such “work” as a negative, it should be viewed as a key building block in not only providing the right understanding of the clients’ needs, financial and emotional, but also in establishing long term successful business relationships for the adviser. By understanding clients on a personal level rather than just viewing them in terms of a financial factfind or an investment profile, the relationship strengthens as does the likelihood that the client will respond positively to any advice given. This can only help to ensure that a long term business relationship will develop and thrive beyond any short term product sale.

This article is an extract from a White Paper on financial risk: “Dealing with Financial Planning Risk – Directing Porfolio Decisions or Navigating Behavior?”

If we want to effectively mentor and develop others then we must get them to think. Why? Good thinking yields good judgment; good judgment yields good decision-making; good decision-making yields win-win scenarios for all parties involved. It produces an owner mindset if we are careful to create a culture that supports risk-taking and innovation. Yet in juxtaposition to thinking cultures are many of today’s business environments, where we’ve followed the same protocol as the rest of society, engaging in telling platforms, communicating conformity rather than encouraging the originality and creativity that come from contemplation and having our conclusions tested by the questions and thinking of others.

If we really want to develop staff into people that can ultimately take our place, we have to engage in a more radical approach. I remember becoming aware of this truth when my boss walked into my office one day as I was standing in front of my window, staring at the outside world. He snuck up behind me and said in a pronounced voice, “Caught you!” I was so embarrassed–I knew I wasn’t really “working.” I’ll never forget his next statement… “I caught you thinking, and just so you know, that’s what I pay you to do.” He then walked out. This boss of mine is the reason I am who I am today, thanks to his ability to know the right and professional thing to do to make me a better man and a more professional manager.

Below are some keys steps to develop thinking in your staff:

• Ask Questions. A professional manager will ask discovery-based questions rather than provide answers when employees approach them with problem-solving needs. This can feel uncomfortable for staff, since it exposes their current (and usually inadequate) thinking and makes them feel vulnerable. A safe culture is a prerequisite. In school, when taking tests, we are presented with questions for which we must provide answers. We study because we know we are going to be asked difficult questions. And if we’ve studied hard enough, we’ll give the right answer. Telling bosses stunt the growth and development of their staff.
• Next Steps. To ensure an employee fully owns their job, all next steps must be placed on them. If we say to our staff, “Let me think it over and I’ll get back with you,” we’ve stumbled in our professional role. What we are really saying when this happens is, “I don’t trust your thinking, so I’m going to use my thinking until I come up with the right answer.” One of the key principles when training a soldier how to shoot is to keep the instructor’s finger off the trigger. If we hope to increase our employees’ competency over time, we need to push the thinking down, keep the problem-solving on them, and avoid doing their work.
• Insure Decision-making. It would be a disaster if, by only asking questions and assigning next steps, our employees went out like the old cartoon character Tennessee Tuxedo and acted on their half-baked ideas. We’d spend much of our time accounting to our boss, making excuses for the actions of our employees and our inability to lead. This is why I like Bill Oncken’s Freedom Scale. Depending on our anxiety level, there are certain levels of freedom we assign to employee decisions to insure sound actions. If we don’t like their ideas, rather than give them the answer, we find the next best question to ask to help them see the bigger picture.

I know what you are thinking. All this sounds great but it takes too much time. And, time it does take. But, like a good financial investment, it means delaying current gratification for long-term gain. The truth is, for a telling boss, he or she will spend most of their time answering the same questions over and over again, which is a waste of time. By applying these principles on the front end of staff development, we’ll produce people who will ultimately think and judge the same way we do. If you want your staff to improve in their judgments and decision-making, then you must cultivate your thinking in them. This same process works well with teenage children, by the way.

Coaching questions: When your employees seek your direction or some version of problem-solving, how do you usually respond? How can you take steps to make sure your thinking is being developed in them, so that they can ultimately replace you in a succession process? Write your answers in your journal.

Read more coaching principles from Dean Harbry on the Internal Innovations website.

This first impression is based 55 percent on appearance, 7 percent on the words we use during course of our conversation and 38 percent on the tone of the voice.

So even before you get sufficient time to demonstrate your abilities, prospects and clients have formed their first impression and created “labels” (serious, fun, blunt, friendly, etc.) about your personality.

The same is true for you as you meet prospects and clients.

Why is it so important for you to prove (or disprove) these first impressions to understand who your customer really is deep beneath the surface?

Because it has major implications for three areas of your business:
1.    Attracting new clients
2.    Designing portfolios
3.    Ongoing service

Attracting new clients is all about the ability for you to quickly build trust. This involves understanding not only your client’s personality, but your own personality strengths and struggles.  Are you a natural listener?  Are you empathetic or more focused on outcomes?  If your style is matched with the prospects, you will build trust with less effort.

When designing a portfolio, many advisors neglect to plan for the financial personality risks. Some clients will envision themselves as bigger risk takers than what they project themselves to be with you.  Or, they may say they are a saver when their expense account proves the contrary.  Discussions on these subjects are very delicate because many clients do not want to admit (or even know) who they really are a deeper level.

Finally, how can you customize your client experience when you may not even know who your customer really is beneath the surface?  You have a lot of different personalities working with you in your office and each one may have to adjust their style to make the client feel truly cared for and understood.  Every marketing action should be tailored to the personality of your clients.  No need to send a long newsletter filled with market data and facts to your “big picture” clients.  Are you looking for more referrals?  Certain types of clients are much more likely to give them to you if you know their personality.

Is there a way you can know a customer within the first meeting, or even better beforehand?  Or, do you need to wait a year to observe whether their actions and words match to find out who they really are?

Dare to get beneath the surface with your clients. Discover practical and actionable behavioral solutions that you can use with your clients to uncover who they are to create unique customized experiences.

Learn more by visiting http://www.financialdna.com

People who write blogs or columns like this similarly have an ulterior motive. Sometimes it is to promote a product, sometimes it’s to promote themselves. I’ll own up right now and admit that my agenda is to draw attention to prospective clients about our financial planning services and the value that such planning brings to them.

Irrespective of the agenda, one of the most telling quotes that I have come across in this regard is that attributed to Steve Forbes, the publisher of Forbes Magazine who said “You make more money selling advice than following it. It’s one of the things we count on in the magazine business along with the short memory of our readers”. What Forbes was really saying is that the reader reacts to many financial advice articles in the same way that they watch the latest soap on TV, football match or latest cinema release. It is all about entertainment value. Except, that following such entertainment value can have a serious financial cost.

The problem with self promotion is that it can be misinterpreted as the right way for the reader to act. When articles, blogs, books or media appearances are too tightly focused you could be forgiven for thinking that you have missed a trick. No doubt you will have read or listened to features such as “10 ways to save money”, “5 ways to invest”, “3 things you should buy”, “Get out of stockmarkets now” and “Get into stockmarkets now”. Who is right? Who is wrong? It all depends on your personal needs and perspective.

And therein lies the issue. Generic advice is not specific to the reader even though some elements of it may resonate with any one individual. More often than not, it has no relevance. Why is that?

For one, everybody’s circumstances are different even if at first glance they appear to be similar. Age, health, goals, aspirations, personal indebtedness, potential of future gifts or inheritances, personal relationships – the list goes on. Everybody is unique, that is what makes the world the interesting place it is.

People giving advice rather than just promoting a personal agenda also give advice based on what has become personal to them. 18 months ago, I wrote a piece in the Sunday Times based on having to arrange the finances for my aunt’s stay in a long term nursing home. My experiences shaped my perspective and while it no doubt struck a chord in a number of people’s lives, judging by some emails I got afterwards, for the vast majority of readers it had no direct relevance at least not at this point in their lives.

The same thing also happens with the financial titbits that we glean from conversations with family and friends. Think back to the heyday of the Celtic Tiger and the many conversations you probably had over a cup of coffee, a night in the pub or over a dinner table while out with friends or family. Financial matters always surface at some stage and stories of foreign property purchases, buy to let in Ireland, investing in a specific stock or borrowing to invest more than likely popped up in the conversation. We’ve all been party to such discussions and many have subsequently acted on them. Why? Because we wanted something that we didn’t have. Nevertheless many didn’t stop to think if it was right for them and their own personal financial circumstances. They got caught up in the moment of greed and sought out something that allowed them to “keep up with Jones” even if they might not eventually have been able to afford it.

And this is the point. Other people’s financial affairs are personal to them. Our financial affairs are personal to us. These financial matters should be based around what is most important to us and our family’s lives. It has to be. You don’t live someone else’s life, you live your own.

By drawing up a financial plan that is personal to you, you will be able to take into account your own circumstances, goals and aspirations. The usage of specific financial products and particular financial strategies is really only the last 5% of financial planning not the first 95%. Too often we get that perspective about face and indeed many advisers do so too. In fact, some years ago I read a statistic from a survey carried out in Holland which stated that it took only 27 seconds for an adviser to first raise the issue of a specific product in a financial planning conversation. Such an approach is wrong and it is not confined to our continental cousins. I am sure that if a similar survey was carried out in Ireland it would produce a similar result. The bottom line is that the usage of financial products should only be raised at the far end of such conversations.

So the next time that you read or hear a particularly vehement piece of generic financial advice, ask yourself some questions. Does this person have a vested interest in promoting something to me? Does taking a suggested course of action confer any specific advantage to me? What are the financial downsides and what are the potential consequences for me and my family if it goes wrong? Do I really need to act on it? Have I reacted to other such advice pieces in the past and lost money?

This last question is the real question that financial readers need to ask themselves. Sometimes taking the metaphorical deep breath and doing nothing is actually the best thing that you can do.

To uncover your unique performance success factors and risks for life and financial decision-making, and those of your clients, click here.

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 Gap^TM?

• 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.

Let’s 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 what’s 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 what’s 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 if’s 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.

Some people believe in the “end-justifies-the-means” approach suggested by the likes of Niccolo Machiavelli, author of “The Prince,” while others relate to the more servant-leader approach articulated by Jim Collins’ in his book, “Good to Great.” We could easily move to a debate about what’s ethical versus effective, and totally miss the fact that all leaders work with human beings who possess the facilities of mind, will and emotions, rather than the hoped-for robots that respond to commands with precise execution and blind obedience.

The bottom line is this: those leaders who focus on winning the active support of those they lead, utilizing wholesome influence skills, historically have better results than those who use the coercive, stern discipline approach, supported by shame and humiliation, to get people to act. Anyone I know, if asked to choose between William Wallace and Adolph Hitler to be their leader, would align with William Wallace based on his ability to lead from the front and inspire his people, and, whose dedication and love for his men were clearly known and demonstrated. So what guidance does this provide for us in our quest to become true leaders?

True and good leaders are those who have the ability and energy to sacrifice for a cause greater than themselves, while focusing on the welfare of those under their charge, leaving their own personal concerns and desires for last. This choice and lifestyle is professional behavior, and not something one arrives at easily–anything less than this is something other than true leadership. If our motive for becoming a leader is rooted in a desire for power and/or money (cast as “career growth”), we will likely harm our people and the overall cause, doing ourselves no good in the end. The proper motivation for leadership is rooted in the discipline of service. And, while we may fool ourselves regarding our true motives and desires, they will be crystal clear to everyone else.

Here is a good prescription to follow, to make sure we are walking down the right path.

1- Do justice. Do right by the company and its clients, as well as your staff. When there are tensions between any of these constituencies, ask yourself the question: What creates a fair, win-win for all concerned? Don’t be satisfied with anything less. If someone is misbehaving in some way, violating the principle of justice, move toward them in a spirit of wholesome conflict and stand strong. Follow the principles of justice and fairness.

2- Love mercy. The way to get people to act as a volunteers, and serve with a whole heart, is to adopt a development mindset and avoid being accusational or judgmental. Being judgmental harms people, regardless of your intention. Most people are eager to learn when given a true opportunity in a safe environment. Just because someone can’t read your mind doesn’t mean they are intentionally trying to make your life hard.

3- Walk humbly. The egotistical leader is a total turnoff to almost all followers. For those who embrace the narcissistic model, people will bemoan their leadership. Don’t assume that you are exempt from this pitfall. We can’t see pride in the mirror. If you’ve made it about you (put yourself in the center) and fail to truly serve your people with whatever degree of power you have, you’ll never have the respect and therefore the sacrificial volunteerism of your people. If you make it about them, versus making it about you, they’ll follow you forever.

Coaching questions: Where might you need to grow in your own motivations and therefore in your leadership skill? Who can help you to manage that growth and provide accountabilities for your success? Write your answers in your journal.

Read more coaching principles from Dean Harbry on the Internal Innovations website.

“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

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

The same thing as men…TRUST.  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.

Building 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 can’t 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 else’s 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 industry’s 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: http://www.financialdna.com

We all hear the list of resolutions that individuals as well as leaders make as a part of tradition to start a new year. I just recently read a blog post that listed 11 resolutions for leaders. The author must have written this suggestion after one too many spiked eggnogs!

Resolutions need to be limited as change is incremental and your brain can’t keep track of too many changes at one time. So if you need to narrow your list down to 2-3 changes here are my suggestions to narrowing your list.

1. Make sure that the resolution is a SMART one. Just like goals,  resolutions need to be specific, measurable, achievable, realistic, and time bound. If the resolution doesn’t meet these five criteria, then eliminate it! And remember to state in the positive, “I will” is much more powerful than “I won’t”
2. Secondly, can you use your strengths to achieve your resolution?  Read more…

Read more on the Executive Velocity website.

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.

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.

Today’s 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.

Often we hear about businesses reducing their direct contact with customers in favor of online processes which draw on online data.

Almost every organization uses some type of consumer information to guide their strategic and operational decisions. As a researcher I am constantly amazed at the amount of information collected about the ‘customer’. Using social media, spending  analysis, surveys into purchasing behavior, looking at competitors to see what their customers are doing, provides untold amounts of data insight into customer behavior.

Clearly its critical to such a gathering of data to ask the right questions – but I wonder how much more could be gleaned about customers were we to simple have a conversation with them about their plans, dreams for the future, hopes, expectations and generally walking in their world and in their shoes for a short time. The key is to have such conversations on the customer’s terms so that the discovery potential is increased.

For example: financial services businesses are looking to improve customer service by creating differentiation through streamlined processes and by reducing complexity; yet the answer to restoring trust from the customers to their financial advisors might well lie, not in streamlining processes but,  in providing advisors with customer data on how best to communicate more effectively. To get going on having more customized communications, Advisors need to invest time into discovering the unique life and financial decision-making patterns that make up the financial personality and risk taking behaviors of clients for helping them achieve their quality life goals and to live with meaning.

The financial industry has been going through unprecedented turmoil; rebuilding from the ‘ruins’ needs to begin at the front line by saying…..I’m Listening – Let’s Talk and for those behind the scenes to provide customized data that supports this approach.

Visit the Communication DNA website to learn more about how you can improve customer engagement.

When people talk about risk in the financial planning process they are usually thinking about the investment risks on a singular and situational basis. However, the problem is that they are not thinking about all of the other financial decision-making and relationship risks that can equally, or sometimes to a greater degree, influence the financial planning outcome. Financial planning at a holistic level is more than being solely about investment management and investment products.

In addition, through our Financial DNA Summary Report which accompanies this report we provide more information for assisting advisors to interpret and facilitate the client through financial planning discovery. In this report, we provide insights on the client’s Investment Portfolio Parameters based on their natural level of emotional comfort in taking investment risk. This information can be easily linked to the advisors investment allocation model.

1. The questionnaire models only allowed for uncovering situational investment risk propensity and not investment risk tolerance, financial risk behaviors and relationship risk behaviors;
2. The situational nature of the questionnaire format inherently leading to the data not being reliable for long term portfolio development;
3. Even if the results were consistent over time they would nevertheless be skewed to the high side because of the scientifically proven human tendency for the participant to “self-promote” by scoring themselves higher than what they are in reality.

I wonder where the strategic conversations will turn to… How can we attract and/or retain customers?

By now the majority of companies will have some elements of a social media some of which will be integrated with their CRM. But what actually needs to shift significantly to effectively engage customers for the long term lies not in the whizziness of the latest social media investment but more importantly in getting to know your customers communication style and matching service, advisors, product to them.

Social media is changing customer loyalty; suddenly customers have access to faster, wider rages of choices than ever before. Having the ability to track customer’s behaviors and their preferred communication style could be the difference between keeping and losing a customer.

Click here to see how you can get ahead of the game.

The most recent product release for the development team is our new DNA Talent Report and customizer. Personally, I am excited because this gives all DNA users a chance to play me (e.g. Product Development Manager) for the day and design their own reports from start to finish.

This new feature provides our users ultimate flexibility in the application of DNA Reports, regardless of the application.  This new flexible model allows us to apply personality data into any application and simulate how an individual’s natural behavior style will apply in a specific role whether it be a client/ customer role, job role, or any other role you define.

Get started and build your report by following the 2 simple steps below.

1. Choose to build your report using our templates or start your design from scratch

In our beta testing for this product, we did tests with sample groups who were in our Business DNA & Financial DNA communities and also in very niche communities such as book promotions, Leadership Coaching, or manufacturing. Through these tests we developed template reports which you can use or choose to start completely from scratch.

Templates Available:

Financial DNA Investor Talent Report
Financial Advisor Talent Report
Leadership Talent Report
Business Talent Report
Wholesaler Talent Report
Accounts Receivable Talent Report
Accounts Payable Talent Report
Outside Sales Talent Report
Inside Sales Talent Report
Career Talent Report
Sports Talent Report
Entrepreneurial Talent Report
Family Life DNA Report

2. Choose 10 items which you wish to show on your report

Next, choose 10 items which you wish to show on your report- choose any factors or insights available on our reports and choose descriptor words which will represent the success factors or risks which may apply to that specific insight you chose. Our system will do all of the calculations for you, show you what their score is for that attribute as well as determine if it is a success factor or a risk for the given role you specify.

3. Design your report

Finally, add colors and graphics to your reports to make it your own. Customize the heading colors, graphs and logos.

To start customizing your report, email inquiries@dnabehavior.com and request a Report Customization Guide.

The topic of risk profiling is quite rightly gaining increasing attention all around the world in the past 12 months. The turbulent markets, increasing compliance obligations and the need to add value are bringing the topic of client and advisor behavior to the forefront, and will do so on an exponential basis in the coming years.

Based on our extensive research the key point that advisors need to recognize is that the questionnaire format underpinning the validated psychometric model is equally as important as the perceived output from the process.

The customary approach to addressing risk in the financial planning process is to measure investment risk propensity on a singular and situational basis. The strategic weakness with such investment risk profiling instruments is that their singular nature perpetuates financial planning as being solely about investment management and investment products.

Since 1999, we have advocated the development of holistic financial planning that can assist clients to achieve their life and financial goals. We believe that this broader viewpoint embraces far more than just investment risk and moves the paradigm to financial personality. It also necessitates the objective and reliable measurement of how personal financial clients will behave on a long term basis and points very clearly towards educating them on how their behaviors will impact on their financial wellbeing and relationships.

In order to assist advisors interpret and manage a client’s investment, financial and relationship behaviors across 10 key behavioral dimensions we are pleased to announce the launch of a new 1 page Financial Talent DNA Report. Following considerable research and feedback we have simplified the client reporting to be more investment, financial and relationship risk focused than our traditional “Wealth Mentoring” reports, which are also still available. A sample of this new 1 page report is shown below.

In addition, through our Financial DNA Summary Report which accompanies this report we provide more information for assisting advisors to interpret and facilitate the client through financial planning discovery. In this report, we provide insights on the client’s Investment Portfolio Parameters based on their natural level of emotional comfort in taking investment risk. This information can be easily linked to the advisors investment allocation model.

We believe for our current users of Financial DNA that our new reporting structure will help provide a more valuable client experience and also enable more robust discussions with your clients. For advisors considering using Financial DNA our desire is that you now have a compelling behavioral discovery solution which is “Platinum Standard” in terms of a highly reliable psychometric construct and simple advisor-client experience.

When we started developing the Financial DNA Discovery Systems in 1999 we knew that there needed to be a paradigm shift in the validated psychometric model for constructing risk profiles because many used a traditional scoring model. Notwithstanding, some of the traditional models may be psychometrically validated they nevertheless had 3 fundamental problems:

1. The questionnaire models only allowed for uncovering situational investment risk propensity and not investment risk tolerance, financial risk behaviors and relationship risk behaviors;
2. The situational nature of the questionnaire format inherently leading to the data not being reliable for long term portfolio development;
3. Even if the results were consistent over time they would nevertheless be skewed to the high side because of the scientifically proven human tendency for the participant to “self-promote” by scoring themselves higher than what they are in reality.

Our decision was to utilize a Forced Choice Assessment Model because it has been academically proven through independent research to be a far more accurate and reliable predictor of behavior than the Traditional Assessment Models that ask the participant to rate statements from 1 to 5 or True/False.

Research has now shown that the traditional questionnaire format may lead to the over inflation of scores by one standard deviation, which is statistically very significant. This exposes a very material risk for advisors who over rely on an instrument that uses a traditional questionnaire format and then do not conduct a proper behavioral interview with the client.

To learn more about Financial DNA and the next generation of behavioral discovery capturing all dimensions of financial personality using a highly validated and reliable psychometric model, please visit http://www.financialdna.com.

If you would like more information or to undertake a trial please email us at inquiries@dnabehavior.com.

There is endless ‘chatter’ around engaging customers; understanding the consumer’s headspace; how they are using ‘the cloud’; understanding their ‘buying behavior’ and how to shift focus to engage this new breed of customer to improve business bottom lines. IT departments and Marketing heads are likely left asking what it all means for their business. But they know they need to get on board in order to leverage customer insight to inform growth strategies.

To cut through the confusion the first step is to realize that there is an essential difference between winning market share and engaging and retaining customers. Going after market share as a priority is between business competitors and rarely involves the customer. However, engaging customers through gathering and understanding behavioral intelligence creates a high-value relationship, one that customers see as having worth.

To provide a tangible solution to this problem, more and more organizations are realizing the power of behavioral profiling; using this approach to not only understand how to communicate more effectively with customers but also to understand their decision making style.

With technological advances such as this it is now possible to understand, like never before, your customer’s behavior and communication style. This holistic knowledge of your customer will fundamentally improve how your organization interacts with customers. Taken a step further it allows businesses to match sales people and advisors to the communication and decision making style of their customers.

For more information, visit the Communication DNA website.

What were your favorite strategies for improving personal and business performance this year? What did you accomplish and what are your goals for 2013?

The following 10 behavioral strategies will lead you through to a successful year-end and help you plan for the new year.

1. Demonstrate customer appreciation based on knowing what motivates each customer.
2. Complete an organizational talent review to determine whether each of your employees is using their unique talents.
3. Review your team members’ communication styles as well as the strengths and blockages within your team.
4. Evaluate current levels of customer engagement in your services.
5. Know what motivates each employee to implement a non-financial employee rewards program.
6. Build customer workflows that manage each customer’s expectations and meet their service needs.
7. Review your leadership legacy.
8. Learn how each of your family members likes to be communicated with.
9. Address the amount of risk you are currently taking in your investment portfolios.
10. Reflect on your Quality Life goals.

To learn more about our DNA Behavior solutions for addressing these areas, contact us at inquiries@dnabehavior.com.

Whether it means expanding the social networking team to ensure every post on their Facebook page is responded to or taking a closer look at the User Experience to optimize navigation of their website, more and more businesses are putting processes in place to meet the increasingly high demands of customers. And they’re not only doing this to ensure business growth – businesses are taking these steps to safeguard their survival. These businesses understand the importance of keeping customers happy. They know that serving the customer as the customer wants to be served produces a boost in brand appeal as well as the bottom line.

Reaching customers through the right channels and having a user friendly website may make it easier for the customer to connect with your business – but how is your business doing once the customer actually connects; when interacting with the customer?

When the customer received a response to their support ticket did it make them feel relieved or stressed, and did the email campaign you just sent out provide just the right amount of information or discourage recipients with too much?

Unless you know the communication style of each customer you won’t be able to answer these questions. Think about how technology can help you solve this problem by identifying the communication style of each customer and employee across the business to deliver an automated process for customizing the customer experience and increasing customer engagement.

The benefits of having this behavioral data about your customers are many, but here are some of my favorite reasons for understanding customer communication styles:

1. It’s makes customer segmentation simple. Knowing the communication style of customers allows for automatic segmentation of your lead and contact base. Some customers will want very detailed information while others will want a few bullet points. When you know which customers are which, you can split them into their appropriate groups and serve them accordingly.
2. You can provide a customized experience. One size fits all may work sometimes but custom-fit is preferred always. When you know each customer’s communication style, you can easily structure your approach and message in a way that appeals to them. This will raise their level of interest and engagement.
3. Customers will like talking to customer service. Now that you know the communication style of each customer and employee – you can match them.  Imagine if each time a customer call or email came in, it was automatically routed to an employee with a similar communication style. The result is a more productive and comfortable conversation. This is a great way to make your customers feel more connected to your team and therefore your business.
4. You can make workflow management work for each customer. Setting up workflow processes can be a guessing game. Should leads receive monthly calls from the sales team or a marketing email each week? When you know the service preferences of each customer you can say goodbye to guesswork because workflow guidelines for each of the 4 communication styles have already been defined. Allocate your time and money to the most effective strategies for each.
5. You can market intelligently. As someone who is passionate about marketing and advertising, I have always had an appreciation for businesses that make an effort to truly understand their customers as the customer will be better served as a result.

   
   The more clarity you get on what matters to your customers, the easier it is to design, develop and position targeted marketing messages and advertising campaigns. So as you uncover behavioral information about your customers, systematically apply it to each level of your marketing programs. This includes simple segmentation for email campaign lists, customization of email templates and an overall measurable improvement in your marketing performance.

What are your top reasons for understanding customer communication styles?

To learn more about customer engagement with Communication DNA, click here. Contact us to get started at inquiries@dnabehavior.com

If you are a current Salesforce CRM customer, Communication DNA is also available in the Salesforce Appexchange.

Have you ever considered how much the advisor’s behavior impacts the investor’s performance? The reality is that advisors are human as well. They have strengths and struggles which impact their decision-making and how they respond to the financial markets. Even more important is that advisors need to realize that their behavioral style could be different to that of the clients, and therefore they have to be aware of what this means.  You can also learn more by visiting the following blog by Samantha Allen:  http://www.financial-planning.com/blogs/Forget-Investor-Behavior-What-About-Advisor-Behavior-2681735-1.html

Research shows that some advisors themselves have a “myopic loss aversion” resulting in extreme caution. Then there are other advisors who have extreme “over confidence” and can be blinded about the potential dangers of the strategy they have recommended. There are also advisors who just get stuck in their own strategy because that is what they know and believe in but do not know how or when to adjust. Ultimately, the problem can become that the clients portfolio starts looking like the advisor.

Our experience has also been that if the advisor has high levels of personal awareness then they have a greater chance of managing the influence of their behavior on the client’s portfolio. This ability is increased if the advisor uses an objective behavioral discovery process for themselves and the client. This will help the advisor more clearly and confidently navigate the differences.

If you take the graphic below which compares the behavioral style of Chris Coddington  as the advisor and Helen Jones as the client you can see the differences that have to be navigated.

Financial DNA Comparison Report

Chris is a driven pioneer and risk taker who will be focused on performance. But will he push Helen too far out of her Content lifestyle zone? Will Helen be able to control herself when she hears new ideas at the dinner party?

To learn about your style, complete your Financial DNA assessment and then start seeing how different you are to clients. Please visit www.financialdna.com.

If you would like to access the whitepaper: “ Dealing with Financial Planning Risk  – Directing Portfolio Decisions or Navigating Human Behavior“, click here.

The truth is most of the topics we discuss in this blog also apply to our families, neighborhoods, and most all other contexts of life. I hope you think beyond corporate as you contemplate today’s principle.

System Irrationality. System irrationalities reveal themselves when we think, plan and build processes one way, then get unexpected outcomes as a result. One clear and predictable example is the way in which we incentivize people. If we hope, for example, to engage directors who will develop next generation leaders through a deliberate mentoring approach as part of a succession process, but only incentivize them with financial reward for increasing business, then we shouldn’t be surprised when no leaders emerge to replace them. It’s human nature. We will reap what we reward. Imagine Navy Seals who are trained to guard and protect themselves only, when under attack. How effective will they be at achieving complex missions? They are rather shaped with engrained thinking to protect their companions first and worry about themselves last. They accomplish almost superhuman feats as a result.

As professional leaders, we can have access to similar results by utilizing the appropriate human incentives. When organizational leaders understand and employ the secrets of selflessness, true teamwork will occur that will have lasting, sustainable corporate impact.

Coaching questions: Where are you experiencing system irrationalities and getting less than desirable results? What inspirationally-based human incentives can you apply to cultivate hoped-for outcomes?

Read more coaching principles from Dean Harbry on the Internal Innovations website.

Wall Street can create statistical “white noise” that makes everything so complicated, when in reality, wealth management is very simple – it’s so simple as to be almost boring. Let me be clear, it isn’t easy, but it’s simple.

My job can resemble a broken record because good advice doesn’t change. Don’t pay fixed bills with variable money, establish your perpetual cash flow stream, and create a healthy “break glass in emergency” stash that can greatly reduce the stress of unexpected financial hiccups. Once this is done, you can enjoy the ride because you have the tools to survive and skydive another day.

Read more from Rusty Holcombe on the Holcombe Financial Blog.

First, managers and leaders are not the same thing. Managers do well at the business side of things, and leaders do too—yet, leaders must also excel in areas beyond the ability to get basic business things accomplished.

The following five areas of behavior are not the only skills executive leaders should seek to improve, but they ones that are important, particularly in today’s world.

Reflection
For an executive leader, reflection may be the most important area, according to an AchieveGlobal study, which had a goal of developing a comprehensive model articulating key areas of focus for 21st-century leaders. 
A leader’s ability to successfully navigate continually changing, uncertain waters requires continual reflection and improvement. 
Leaders demonstrate the ability to reflect by having the ability to:

• Ask themselves how they can become better.
• Act with the self-confidence to experience new behaviors.

Read more on the Executive Velocity website.

Author: Beth Armknecht Miller, President and Executive Coach, Executive Velocity Inc

I’ve thought long and hard about relationships at work. I find people’s beliefs about this subject to be intriguing. In life, we end up trying to manage bad behavior in others through rules and discipline rather than simply encouraging good behavior through incentives. It’s like swatting a dog when he pees on the carpet rather than giving him a biscuit when he sits by the door. Having right relationships should be our supreme goal in life.

Relationships. There are different types of relationships in the work setting: manager, peer, vendor, direct reports, etc. And, each relationship has a specific context that creates a unique way of relating. Some people hesitate to engage in friendships at work as they believe it confuses the managerial role. If one’s view of friendship means being nice, never confronting, and maintaining peace at all costs, then perhaps it’s true. If friendship rather means clear communication, speaking the truth in love, and disagreeing when necessary to maintain unity and alignment, then this is transferrable. Relationship defined is an expression of human connection that can look different depending on role, without having artificial constraints. Just because someone is married doesn’t mean they can’t have wholesome relationships with other members of the opposite sex. All business-related relationships should be characterized by love (willing the highest good for another), compassion (even when discipline is required), communication (speaking openly and directly), to be wholesome, fruitful, and productive. Humans have the same needs regardless of the context. Old-school thinking that blocks out friendship at work is missing the mark.

Coaching questions: How would you characterize your relationships at work? How might you bring more humanity into the equation?

Read more coaching principles from Dean Harbry on the Internal Innovations website.

Moscone Center, San Francisco, CA

I have been to a lot of conferences around the world in the last 10 years. Through these conferences I have met some great people, made some life long friends, had some good meals, listened to the odd useful speaker and picked up some good insights. I would generally say this is the same for many people.

BUT, how many times have I walked away with that “WOW” experience. Never! That is until I attended Dreamforce last week put on by Salesforce.com at the Moscone Center in San Francisco.Saying this strategists like me can be highly critical of events and find them draining with our introverted, results based and need for information nature.

From the moment I arrived with 5 members from my team, I was fully engaged in the whole event. So was my team. Salesforce have truly mastered the art of putting together a conference which is very connective, business social and full of high quality content. It is not often in 3 days you get to hear leaders like Richard Branson, Colin Powell, Jeff Immelt and Tony Robbins and other innovative executives from multinational businesses speak. With 90,000 attendees the atmosphere was electric and buzzing. Yet it was all very friendly and logistically easy. Then add on the amazing night time entertainment with open bars at no cost (other than maybe a headache in the morning for the hard party goers).

Red Hot Chili Peppers concert at Dreamforce 2012

There is no doubt that Salesforce promoted their business which they should be doing. However, it was all done through real life case studies which showed the future of business and how we all will need to operate in a “business is social” environment.

As I have said to many business leaders in the past week if you are looking to learn how to expand your business, get new ideas, meet different thinkers and place yourself in the future look no further than Dreamforce. Add on, you will have a great time on the business and social side. This is a great event to go and explore how you can tap an amazingly big business ecosystem and entertain your team and clients with a once and life time experience for a very low cost and little logistical management.

See you at Dreamforce 2013!

Then there are advisors who have focused less on the investment side and gone to the life planning side. This too is important in the context of knowing the client and helping them achieve their goals.

However, what sits between whether the client creates and protects the wealth to achieve their goals is their behavior.

In a nutshell, there are many more risks than only the clients current investment risk tolerance that need to be known in building a long term financial plan and investment policy statement. What must also be known is the clients natural “hard wired” risk behaviors, their financial behaviors (eg spending and financial habits) and their relationship behaviors which if not managed can cause financial risks.

To learn more, watch the interview Advisor TV.

Visit www.financialdna.com for additional information or contact us at inquiries@dnabehavior.com.

To be successful in this new environment the financial advisor has to become more client centered and demonstrate a higher degree of competence.

The “new normal” of providing financial advisory services will now more than ever need to start with a highly robust process to knowing the client’s financial behavior which enables a highly customized life long experience to be delivered. Further, to get buy in from the client the process will need to offer value for the client and be educational.

Knowing the client’s financial behavior is more than guessing or having a shallow understanding of their current investment risk appetite. It is only by understanding the client from the inside out and, in particular, the mismatch that arises between risk propensity and risk tolerance as well their attitudes to spending, trust and adherence to goals, can an advisor truly know his client.

Dealing With Financial Planning Risk White Paper

Our recently released white paper on “Dealing with Financial Planning Risk” provides research, insights and actionable solutions supporting an advisor going beyond a superficial understanding of their clients investment risk behavior to also knowing all of their investment, financial and relationship risk behaviors which directly and indirectly impact wealth creation.

The future is in the advisor becoming the behavioral guide of their client using cutting edge technology platforms to drive efficiencies in the provision of advice.

Please click here to access the white paper.

Also, if you would like to discuss how you can implement a behavioral approach in your business, please contact us at inquiries@dnabehavior.com.

I have selected 4 cutting edge apps to help with your marketing, client service, workflow management, compliance, document creation processes, and keeping a watchful eye on your client’s portfolio.

Communication DNA | Customize your marketing and client service activities

Communication DNA is a customer engagement app used by advisors to discover the emotional decision-making patterns of clients to allow for the real time customization of marketing and client service activities. You as an advisor, use this information to understand what drives your client’s decision making, and help establish the environment that your client’s need in order to financially perform.

Communication DNA delivers your clients communication keys, preferences and contact details directly to your Salesforce account without you lifting a finger.

More about this app

How Communication DNA works:

Process Composer | Workflow Management for your Advisory Team

Process composer is a smart engine to build and automate simple or complex repeatable processes. Create a firm-wide consistent client experience, enable visibility by seeing the status of client requests, & drive Salesforce adoption by imbedding routine processes in CRM.

CREATE CONSISTENCY: build sales, service, HR, and compliance processes so they happen the same way every time.

CREATE VISIBILITY: empower employees with the ability to graphically see the status of client requests.

DRIVE ADOPTION: imbed your routine processes inside Salesforce CRM to create dependency and drive usage.

More about this app

How Process Composer works:

Conga Composer | Easily generate your documents for Compliance

Easily generate custom proposals, account plans, contracts, presentations and emails with content from multiple objects and related lists. Works with Word, Excel, PowerPoint, PDF forms and HTML email in single, batch and scheduled operations.

More about this app

How Conga Composer Works:

Sycamore | Client and Compliance Manager
A simple, easy to use application designed specifically for a financial advisor. Automated workflows, Client communication and seamless data integration help you manage your customers more efficiently and effectively.
A complete client balance sheet is tracked. Assets include bank accounts, financial accounts, holdings and insurance policies. On the liability side, both short term debt like car loans and credit cards are tracked as well as long term debt such as mortgages and home equity loans.

Plus, Sycamore provides checks & approval processes to ensure you stay compliant.

More about this app

How this app works:

In The Center of the Universe, I wrote about how happy I was to complete a survey for BestCoffee.

Within a week, I got another request after I just completed a phone call with my insurance company.  But I must admit, I wasn’t so excited about this request:

Thank you for placing your trust in Popular Insurance Company. 
Your feedback is very important. Please let us know about your recent Customer Service experience by answering a few questions using the link below. The survey takes about 3-5 minutes to complete. We look forward to receiving your valuable feedback as we continuously strive to improve your experience with us.  We appreciate your business and thank you again for choosing Popular Insurance Company.
How did I feel?  The opposite of special: part of a mass production email that was  sent to millions of other customers.  Boring! This must be a parallel universe where they have good intentions but are missing the personalization concept.

Did I take the 3-5 minutes to complete the survey?  No.  Why?  There was simply no excitement or motivation for me to take the next step.  Even when I got another reminder (same type of wording), I hit the delete button.

The lesson?  You need to customize each communication to your clients in order for them to take action.  Clearly, this message was lost on my style.

How do you learn the communication style of your customers to create more meaningful, customized experiences?  Explore the Communication DNA website.

The reason it doesn’t happen as much as it should is because people are not thinking system-wide. To fully leverage our resources, we must encourage this competency and mindset. I hope you enjoy this week’s principle.

System-Wide Thinking. Organizational leaders face complex challenges to integrate people, process, systems and resources to deliver firm products and services. Teamwork, collaboration and system-wide thinking are needed, yet many leaders fail here because they are not effectively employing professional management skills. Strong managerial leaders develop system-wide thinking in others when they empower people to think and act. They do so by utilizing appropriate levels of freedom to ensure quality of output, all resulting from a big picture view. It involves inculcating a high-level vantage point so that direct reports “think it and see it,” before they have to be told. Delegation is used as a tool to create system-wide thinking using employees’ brains as “scratch space.” They push the thinking down and insist that their people to do the critical thinking and problem-solving. They will ask intense, penetrating questions rather than simply providing answers when polled by their staff. This process may take more time initially, but will pay huge dividends over time.

Coaching questions: What deliberate steps are you taking to develop system-wide thinking in your employees? How can you create a laboratory in their minds by asking questions, running scenarios, and insisting that they process complex issues?

Read more coaching principles from Dean Harbry on the Internal Innovations website.

Take a look at this email I received from a well-known coffee shop last week:

We’d like to get to know you better….

We’re big fans of getting it right, from each cup of coffee to the way we share information with you. As a My BestCoffee Rewards™ member, we’d like to know a little more about how you interact with BestCoffee.

So, if you don’t mind, we have a few quick questions for you. We’ll use our newfound knowledge to craft more thoughtful offers and rewards for you to enjoy.

How did I feel?  Special…like someone cares to craft an experience that I will enjoy every time I walk into BestCoffee.

Consistency of experience is marketing rule #1…but off course, you have to understand your customers enough at the very start to create the right experience.

Did I mind taking 2-3 minutes to answer 10 questions?  Not at all!  Why? BestCoffee gave me a reason that put me at the center of the universe….they will craft more thoughtful offers and rewards just for me.

Could you find out more about your customer to tailor each and every service call and product to their own unique needs?  Start putting your customers at the center of the universe!   For ideas, visit  the Communication DNA website.

Most successful businesses understand the importance of engaging their customers and employees for improving business performance. But what steps should they take to increase engagement levels from customers and employees?

To provide a tangible solution to this problem, we created Communication DNA and are now excited to announce the launch of our Communication DNA app which is now available for test drive and download on the Salesforce CRM AppExchange.

Communication DNA for Salesforce is a customer engagement app that identifies emotional decision-making patterns of customers and employees to allow for the real-time customization of sales, marketing and client service activities. Having access to the behavioral data provided by Communication DNA enables business leaders, sales teams, financial advisors, customer service and marketing service providers can now access behavioral data provided by Communication DNA through their CRM to navigate the human differences in their business.

The strategic partnership between Salesforce and DNA Behavior leverages the power of innovative cloud technologies and cutting-edge behavioral research. Also it allows all of Salesforce CRM’s 100,000+ business users to tap into a highly scalable human behavior solution so that they can more easily deliver customized life-long experiences to each of their customers on a scalable basis.

Communication DNA helps close this behavioral gap with a cutting edge turnkey system that can be deployed to discover who the customer is through 12 forced choice questions answered online with the output directly available in the customer’s account on the Force platform at the sales person’s finger tips. Further, the Force platform can then be programmed with alerts and other features so a customized experience is provided to the customer with minimal effort and training of the sales person.
Watch a Demonstration

The Communication DNA app is the first customer-centered human behavioral solution to be directly integrated onto the Salesforce platform. Which means that for the first time Salesforce and its business customers will have the capability to incorporate behavioral intelligence into the CRM which is deeper than just the customer’s historical spending patterns. The CRM will no longer just be a database of customer factual details it will have personality and be able to talk with the customer in a more unique way. This is what has been missing from most CRMs and sales systems.

Click here to test drive the Communication DNA app (a Salesforce account is not required).

For additional information and to get started, contact us.

Given this new environment what is important for businesses to realize is that a lot more structure, focus and work has to be applied to customer engagement across the whole enterprise. Every area of the business must be involved and there needs to be a central co-ordination point which reports to the President and the Board. Customer engagement cannot just be one of those functions of marketing – it must become a pillar of the business.

For a great article on how to structure customer engagement at the epicenter of your business read “Five ‘no regrets’ moves for superior customer engagement by Tom French at McKinsey :
https://www.mckinseyquarterly.com/Marketing/Strategy/Five_no_regrets_moves_for_superior_customer_engagement_2999.
French shows you the role of customer engagement summits, councils, chief content officers, listening centers, and budgets in building the customer engagement foundations.

Of course, once you have established the organizational structure then knowing the customer and providing them with customized experiences to keep them engaged is very critical. This starts with knowing the customers natural DNA behavior to understand how to communicate with them and what their solution preferences are. Businesses from financial and professional services to retailers to real estate agents are starting to value their customers enough to go down this path and structure behavioral discovery in their customer engagement process. Importantly, the bottom line rewards of building deeper levels of customer engagement are huge – The Gallup Organization is saying there is a 23% sales premium on emotionally engaging your customers let alone the additional bottom line benefits of also emotionally engaging your employees.

You can learn more about getting started at www.communicationdna.com