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Behavioral Intelligence

Are Your Clients Cheating on You?


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He’s Just Not that Into You.

Some of you may remember this popular advice book about relationships. So what does that have to do with financial planning?

Knowing that 93.6% of the financial planning process is the behavioral management of the client, I’d say the answer is plenty.

Fifty-five percent of investors with $500,000 or more in investable assets worked with three or more firms in 2014, said a study by Hearts & Wallets, following a behavior the financial research platform refers to as “stable two-timing,” where consumers balance a self-service firm with a full-service firm. That total is up from 49 percent the year before.

The research suggests that the behavior may be driven by consumers who want to use different web tools or online capabilities, or who want to obtain different advice perspectives.

But, in addition, what if your clients are sensing “you are just not that into them?”

You might think that is impossible. After all, you are doing all the right things: delivering solid performance numbers, inviting them to client events, and conducting engaging annual reviews.

Enter personality traits and behavioral biases. Do you know how each one of your clients feel during times of market volatility as well as the specific action you should take for each unique individual?

With market dips, you may be feeling the opportunity to buy some bargains and assume that most of your clients trust you to do the right thing. But getting them a value doesn’t mean they are feeling good about the volatility. You assumed you trained them to look at the long term so all is right with the world.

However, your client might be wondering why you didn’t pick up the phone and give them a quick call of reassurance. And so, over time, this behavior leads the client to the feeling “you are just not that into them.”

That might be why the $500,000+ crowd could be cheating on you. They are hedging their bets and seeing which relationship is worth keeping for the long term.

No advisor wants to admit they may be lacking in relationship skills. But why leave it to chance? Now is the time to adopt a system of objective behavioral intelligence so you can keep your clients in a long-term committed relationship with you and your firm.

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