March 30, 2012

Mapping the Client Genome

Understanding clients’ behavior requires a close—very close—look at their financial DNA

Financial advisor Hugh Massie, president and founder of Atlanta-based firm DNA Behavior International, has long believed that it’s necessary for advisors to really know their clients thoroughly in order to better serve them.

“In particular, advisors need to know how a client would behave under pressure because that’s when behavior changes and emotional decisions happen,” Massie says. “It’s only when people are under pressure that their true DNA behavior emerges, so if you as an advisor can know your client’s financial DNA, you can do the best for them.”

When investors are under pressure, Massie says, they typically revert back to their natural DNA behavior, which is their “go-to” or “flip-back” behavior. Pressure leads to emotions and kicks in a person’s survival instincts, and it is every person’s natural DNA behavior that drives how they will respond to events in their life and how they will make their financial decisions. A person’s natural DNA behavior will also remain consistent throughout their life and so it is highly predictive of their financial decisions.

Massie created DNA Behavior International in order to help advisors figure out their clients’ innate behavioral DNA, in particular their financial DNA. The firm, which lived its first incarnation in Massie’s native Australia, provides advisors with the tools they need to both learn about how their clients perform and react in various situations, and to then discover and apply their clients’ natural behaviors to financial, investment and family succession planning. Most importantly, the company helps advisors and investors learn how to work together to align investor behavior with financial and investment solutions and, through its proprietary DNA Behavior Systems, can uncover individuals’ financial personality traits.

“We’re interested in helping advisors get to the core of their clients’ financial personalities,” Massie says. “There’s been a lot of theory out there on the importance of behavioral analysis and the discovery of the financial personality, but very little by way of practical applications. What advisors need is a practical application and that’s what we provide.”

By partnering with DNA Behavior International, advisors can avail of a number of different tools and services that will enable them to assess their clients’ natural financial DNA, their tolerance for risk and their financial personalities. The firm also provides the means by which advisors can build a fully integrated financial planning model based upon behavioral analysis.

It’s important for advisors to have tools and applicable solutions for behavioral analysis because in the new advisory paradigm, where behavioral finance has taken center stage, the client is king but the advisor is the coach and the mentor, Massie says. Everything hinges on an advisor’s ability and performance, “so advisors have to really demonstrate value,” he says.

For their part, clients need to learn that they need a financial advisor to objectively guide them along and to help them manage their struggles when making investment choices. To match that, advisors must be prepared to play the role of “wealth mentor,” Massie says, to keep their clients confidently on track and manage their emotions, but all the while making it clear that they don’t seek to control their clients. It is only with this kind of an approach that the trust between advisor and client can deepen and result in more optimal financial planning.

DNA Behavior International has developed eight online DNA Behavior Discovery Processes and related DNA Performance Solutions that advisors can avail of and these have been researched and developed since 1999 by a team that has combined academic and practical behavioral discovery development experience. The firm can also customize its DNA Behavior insights to specific and tailored practical applications that allow advisors to increase both relevance and usability.

DNA Behavior International has been serving clients in the United States since 2001 and has a client base of over 2000 leading international corporations, Fortune 500 companies and financial services businesses serving advisors and families. The firm’s services are delivered in over 47 countries and are available in six languages.

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