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Behavioral Intelligence

Short-Circuit Client Self-Sabotage and Empower The Advisor

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Empower The Advisor

Last time in this space we discussed how the industry is more client-driven than ever. That’s not necessarily a bad thing, unless an advisor encounters a client who will not listen to advice and is self-sabotaging.

There are techniques we discussed to help identify and challenge such clients. We agreed that having client behavioral insights ahead of client meetings (and before red flags occur) is an opportunity to tailor your services to each clients uniqueness. So, while imaging a scientifically based data gathering tool as part of an advisors arsenal, lets take this conversation to the next step.

Self-sabotaging approaches are identified and successfully managed when advisors know that:

  • Every client is unique; and each has different wants and needs that must be known and managed.
  • Every client will have cognitive biases, emotions, fears, anxieties, greed and excitement, at varying levels and combinations.
  • Clients and their families lives are complex and each will have their own thoughts on life planning.
  • Clients are better informed and educated than ever before and may wish to take greater control of their finances, for better or worse.
  • Market volatility, lack of trust, and fear have become real issues for many investors; these facets will dominate many client-advisor conversations and the subsequent decisions.

Related: Advisors Should Play a Role in Corporate Employee Wellness

In turn, this same level of insight and behavioral knowledge empowers the advisors to:

  • More effectively understand client behavior and emotional decision making.
  • Understand how to move the client from a need to control to one of mutual relationship.
  • Manage client fear, based on historical market movements, and build confidence in future markets.
  • Uncover and understand a clients life goals (even those they may not have known or acknowledged themselves).
  • Apply a deeper understanding of client behavior to your work on their behalf.

One of the main reasons clients hire financial professionals is to gain objective, expert, personalized advice. When they approach you as though they were the expert, care needs to be taken to avoid role reversal. Only when advisors are armed with insight into their clients behavior and decision-making style can this approach be managed.

Ultimately, advisors who implement solutions that deliver insights to client behavior can help better manage know-it-all or self-sabotaging behavior. But remember that know-it-all advisors also exist too.

Clients are smarter than you think. You wont get their business if you dont understand your own approach. That is why a healthy and professional client/advisor relationship is built on the premise of knowing me, knowing you (cue the ABBA song of the same name).

With an eye toward the fact that you will eventually do the same for all of your own clients, get to know your own inherent behavior and bias. Not only will this self-awareness enable you to work with difficult clients, it will deliver significant insight in to how best to manage your own behavior + theirs.

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