This week I attended the Financial Behavior in Retirement Summit in Chicago and presented “Really Knowing Who Your Client Are”. The presentation guides advisors to understand the importance of knowing the natural behavior of clients and uncovering their life and financial motivations in order to tailor services to them.

By customizing their services, advisors will gain confidence and engage clients. In the planning process, helping clients understand who they really are can improve their financial results.

Financial Planning Magazine has published an article highlighting the presentation. To read the article on the Financial Planning Magazine website, click here: “Confidence and Client Engagement: Keys to Advisor Success“.

In many cases the difference between success and failure is small. One action or one decision or one more attempt can be the difference in the outcome. Usually, we are in the way of our own performance and so it is critical to keep out of our own way.

Have you noticed some people find success easily but fail to keep the results up? Then have you seen that others have the talent but need guidance to get on the right track? There is really no such thing as an overnight success even though that is what we may think. When you get into the story of how the great performers in any field have done it there will always be highs and lows, leaps forward and set backs or challenges. The reality is whether or not you are a natural at something, sustainable performance does not just happen. It takes a desire to succeed and consistent practice of the right behaviors. So, listed below is a list of some performance practices which I hope will motivate and guide you to sustaining performance in your life and whatever endeavors you pursue.

1. Take responsibility for your performance.

2. Competence starts with being confident but realistic about your abilities.

3. Do not sacrifice your goals by being average or allowing others around you to be average.

4. Recognize different personalities are assets to your productivity.

5. Write down your plans and goals so that you keep the right direction.

6. Gaining experience will help you prepare.

7. Have the confidence to never give up negotiating what you are worth.

8. Build high self esteem starting with self respect.

9. Have unquestioned self belief to ride through events.

10. Learn from your losses and do not make the same mistake twice.

11. Regularly exercise and eat right.

12. Be clear about your role in the outcome so you know why the result happened.

13. Actively listen to what others have to say to learn.

14. Do not think negatively as you will attract what you are afraid of.

15. Act and think like who you ought to be.

16. You must find a way for your work and home lives to fit together.

17. Look for positives in set backs and do not respond in fear.

18. Set realistic but challenging goals and be prepared to re-evaluate them.

19. Limit making costly decisions by emotionally reacting to events.

20. A healthy family life is crucial to a productive business life.

21. Greater fulfillment and results will come from showing you care about others.

22. Maintain your persistence by knowing yourself and what you want can be done.

23. Make your team feel wanted so they want to work harder.

24. Use a decision-making matrix to see how a decision fits in with your overall life and values.

25. Create a living and working environment that keeps your confidence high.

26. Be prepared to embrace innovation to stay on top.

27. Recognize there may be more risk in doing nothing .

28. Do not be afraid to take conflicts head on so disagreements can be addressed.

29. If you get a gut feeling about something then follow it.

30. Seek out wise people to talk with about your ideas and plans.

Research is showing that many advisory firms talk about the importance of building relationships with clients. However, the clients do not believe there is a quality relationship. So what is the key ingredient to build your relationship performance?

In our work, we talk about the need for advisors to build relationships which emotionally engage the client. Gallup Research has shown the significant impact this can have on financial performance of an advisor’s business. Emotionally engaging the client requires the advisor to demonstrate empathy for the client. The clients motivations and needs need to be understood, they need to feel listened to, they need to believe the advisor and the firm cares about them not their money, the advisor needs to be approachable and friendly and the advisor needs to openly communicate on the clients terms.

The next issue to address is whether the culture of financial services allows for an empathetic service to be delivered. Recent SEI research in the UK is showing that the clients believe that financial services is “too me” first from the advisor perspective. The advisors and their firms have made success about what is earned and not how clients are helped. Therefore, significant cultural and financial re-alignment is needed not only by advisors but also by the firms and the industry as a whole before there can be true relationship performance based on empathy. The firms and industry need to show that they stand for client care.

In many cases the advisor is left alone by their firm to build the relationships. However, in the future the organization will have to equip the advisors to build client centered relationships. This will include providing them with the right tools, including client profiling.

So what are you doing for high quality client engagement?

I recently read with great interest an article published in the Harvard Business Review called “Stop Trying to Delight Your Customers”. The article addresses a recent research study of 75000 people conducted by the Customer Contact Council a division of the Corporate Executive Board which showed that a major contributor to client disloyalty across a range of industries was poor service. Whereas client loyalty was more based on brand and product.

Recently, Merrill Lynch and Capgemini have issued a very important research study which demonstrates how much investors confidence has been eroded by the turbulent markets. Investors are still very wary of the future. Click Here to read the article.
The article points out that the following:

1. Investors want a more active relationship with their advisors, including a deeper understanding of their investments and how they are aligned to their goals, based on their actual risk profile.
2. Many investors are being driven by their emotions when making investment decisions which is increasing the need for advisors to engage in greater dialogue with their clients.
3. Clients are now demanding fundamental changes in how they are served, and are favoring firms which can understand both their emotional and intellectual needs. This is increasing the need for advisors to incorporate a behavioral finance approach towards portfolio management. Advisors need to be able to incorporate the emotional factors into stronger portfolio management and risk management capabilities. A behavioral finance approach of this nature can be a big differentiator among firms.

This research is very consistent with other research, such as from Gallup, which demonstrates the need to emotionally engage with clients at a much deeper level. This is the new “behavioral economy”.

In all areas of life, people talk about how they can improve and sustain performance. How do we get better results and keep good results regularly coming? This is true for people in their personal lives and careers, businesses, sporting teams and so on.

Foundational to building performance to a high level is knowing your DNA Behavioral style, openly communicating with others and then keeping to a purpose based plan. This is the core DNA Performance Model.

However, the key to sustaining performance is “confidence”. Building performance and starting a “winning streak” is one thing but keeping it going is another. Have you noticed how some people get it together early in their life or career and then lose it later seemingly going into a downward spiral. Some then come back, some do not. Others start slow and then get in the groove and grow. This is also true of businesses and also sporting teams. When you take a look into all of these situations of fluctuating performance the common element is confidence.

When confidence is increasing and is high it can propel you forward further to achieve even better results. However, compatency and arrogance can creep in with a failure to remember what got you there. Then a bad event comes or someone does something great out of the blue and you do not know what to do. This can be the start of a loss of confidence, which can build up. At the same time, for another person who has been on a losing streak they string together some wins and successes. Suddenly, they start the climb upwards.

I would encourage all of you to think about what makes you confident and what makes you lose confidence. If you like, we can help you with looking at your confidence attributes.

I would also encourage you to read the book “Confidence” by Rosabeth Moss Kanter. This book uses plenty of great personal, business and sporting stories to show how winning streaks and losing streaks begin and end.

Resistance to Financial Planning

Last week, there was a Financial Planning Association group discussion in which someone posed the question: "Why do people resist creating a formal financial plan?"

This is a great question and gets to the core of financial planning.

Many people do not know what financial planning is. I think many financial planners are still learning what it means to them. As the industry grows and comes to more of a collective view then this will help. Is the planner about achieving returns or helping a client achieve life and consequently financial goals? What role is the planner playing in the client's life?

Those who accept the planner as their financial life guide will more likely do a financial plan. Another key point is the person's level of personal trust. Do they have fears about planning and sharing themselves and getting help? Do they trust the planner? Both issues are at work.

I also find that if the planner is not a trusting person (and our research shows 70% are not) then this is not conducive to building relationships and getting planning commitment. The question of trust gets down to both a person's DNA behaviors and their life experience. The more the planner represents product and is not independent then trust will also be harder to build.

Ultimately, the more a planner seeks to know their client and make the client feel they are understood then the chances of getting the plan done increases. Further, retention will increase. The client is not a financial number but a person whose life constantly develops.

Last week I was working with one of our Certified Wealth Mentors with my role to offer some behavioral insights on some difficult client cases. The cases were difficult because of the clients’ attitudes not only to financial decision-making but also to life. These cases reaffirmed to me how much trust is core to all dimensions of every client situation. This is why when we redeveloped our DNA personality system in the past year we made trust a new stand-alone personality factor.

Often when we talk about trust it is in the context of our role as trusted advisor and building open relationships with clients. Certainly, this is an important dimension. Talking about trust in this way is fine. However, the heart of truly understanding trust and to knowing our clients is to know where trust comes from. There are a number of very important dimensions to trust that we all need to know. Let me ask you the question: How much do you trust yourself? Trusting yourself is the starting point of building sound relationships and also making sound decisions. Your own level of personal trust will determine whether you will trust others and then whether others will trust you. So, if you want to know whether your clients will trust you, reflect on your own level of self trust and then learn about their self trust.

We all have a natural level of trust which comes with our natural DNA behavioral style and then there are life experiences added on top which deepen or reduce our trust levels. The more we know who we are and have personal confidence then the more likelihood that we will trust.

In one of the client cases I was referring to the client was 60 years old with a very successful business and over $10 million to his name and annual income of over $2 million. However, he was personally unhappy, not prepared to let go of the iron grip on his business or prepared to create an estate plan his family could know about or be involved in. Does this sound familiar? This is a client who has very low personal trust levels and it transcends every part of his life. It will be very hard for this advisor to get close and really provide the advice he needs and on the other side the advisor will find it hard to meet expectations. A no win situation.

Have you seen people make fear based decisions and not be transparent? This starts from low personal trust levels. As a service provider you want to know your clients trust levels early if you are going to have a close and profitable relationship. You will never be able to help this type of person until you can discover the source of the fear. The difficulty is getting them to tell you. I do find that when you can get a client to talk about their strengths and passions you have a much greater chance of unlocking the fear, and trust grows from there.