Financial DNA® · DNA Behavioral Management Guide Report Helps Advisors Guide Clients to the Right...

www.financialdna.com

FinancialDNA®ABehavioralFinancePla8ormforAdvisorstobe“WealthMentors”

1


FinancialDNA®DeliveringFinancialPersonalityInsights“Behavioralizing”FinancialPlanning

Matchadvisoryteams,clients,goalsandsolu5onsSince2001,wehavebeenenhancingthecapabilityoffinancialservicesbusinessesworldwideto“know,engageandgrow”millionsofadvisorsandinvestorsbythedeliveryofuniqueFinancialDNAbehavioralfinanceinsightsdatausingourscalablebehavioralfintechpla8orm.Theprovenoutcomeisaclient-centeredbusinesswhichiscompliantandout-performs.


“TheNewWorldCulture”forAdvisorsHowWillYouPutClientsattheCenterofthePlan

ProductsOfferingsBasedonPersonaModelAssumpUons

TailoredGoals-BasedPlanningUsingFinancialPersonalityInsights

CustomizedBehavioralCoachingPoweredbyaFinTechPla8orm


WhatisGeXngintheWayofClient-CenteredSuccess?Research:LackofBehavioralSuitabilityFromtheFirstInteracUon

1.  Advisorscanonlyengage40%oftheirclients,

leaving60%underserviced2.  Advisorsareonly40%accurateinidenUfying

theclientriskprofile3.  InvestoremoUonscausing7.45%peryear

por8olioloss4.  Advisorbiasescausingunder-performanceby

1%to3%peryear5.  Teamdifferencesandblockagescause

producUvitylossbyupto70%peryear6.  Firm/advisorcenteredcultureleadsto

fundamentalbiasesinsoluUonsoffered–UedtooldwaysofoperaUng


DNABehavioralizesMoneyforAdvisorsandClientsPredicUngPlanningRisksTriggeredbyBehavior

FinancialPersonality Money

EmoUons

BehavioralResponsesDrivingDecision-Making


“WealthMentoring”isarelaUonalprocessthatinvolvesguidingotherswithwisdomtoself-discoverwhotheyareandtheir

prioriUesforaQualityLifethroughamutualsharingoftheirlifejourney.

WealthMentoringTransformtheFinancialAdvisorRoletoWealthMentor

6


WealthMentoringMovingfromAdvisortoWealthMentor

Tradi5onalAdvisoryApproach:•  FinancialPlanningTechnician•  InvestmentManager•  FinancialEduca5onWealthMentoringRole:•  Fiduciary•  BehavioralGuide•  QualityLifeGuide•  WisdomTransferor•  Collaborator•  SoundingBoard WealthMentor

7


BehavioralManagementistheFoundaUonClientsWillReactDifferentlytotheSameMarketEvents

8


FinancialDNASystemsTheScienceBehindthe“SwissWatch”DNASystems

PowerfulandUniqueClientCenteredBehavioral

SoluUonsDeliveredin123+Countriesand11Languages

ForcedChoiceAssessmentMeasuring64

BehavioralTraits

60+ManYearsofDevelopment

InvestmentSince2001

IndependentValidaUonby

Teamwith100+Yearsof

Experience

9


FinancialDNA®=FinancialPersonalityMulU-DimensionalBehavioralDiscovery

AdvisorClientCommunica5on

Goals&SpendingPaIerns

FinancialPersonality

RiskProfile&BehavioralBiases


TheTradiUonalRiskProfilingMethodologiesLeaveyouintheDarkinKeyAreas

YouridealclientHowtoCommunicate

Email,Phone,orMeeUng?+more

RiskProfile

LossAversionPaoernBias

OverConfidenceSpending+more

HardWired

Behavior


Source:The93.6%QuesUonofFinancialAdvisors,MeirStatman,2000

93.6% 6.4%

personalitystyle

emotionspassions

reac5on

excitement

opportunism

Communication preferences

listening fear optimism

anxiety pastexperience Investments

specula5on confidence

Goals-BasedFinancialPlanningPor8olioorBehavioralManagement?

93.6%

offinancialplanningisBehavioralManagement

12


Sources:(1)TheAdvisorsAlpha:PuXngaValueonYourValue,Vanguard2015(2)ModellingbasedonSchwabRIASurvey2015,AdvisorImpactUKResearch2012

BehavioralApproachValueProposiUonofaBehavioralApproach

ClientValue:

150bps1peryearonAUM

FirmROIValue:

50x2++fromincreasedreferrals,retenUonandshare

ofwallet

13


Quickerand91%MoreReliableMethodtoPredictReacUonstoMarket/LifeEvents

CDNA–12QuesUons(2to5Mins)

FDNA–46QuesUons(10to12Mins)


FinancialDNAClientDiscoveryCompleUonProcess

AdvisoryStaffCreatesNewClientAccountinAdminSystem

InvitaUonemailsenttotheclient

CliententersintheusernameandpasswordprovidedintheemailandlogsintotheAdminSystem.

Clientcompletes46NaturalBehaviorForcedChoicequesUons(taking15to20mins)

ClientreceivestheirdesiredreportandAdvisorisnoUfiedtoaccessfromtheDNAAdminSystem

15


46QuesUonNaturalBehaviorDiscoveryProcess(10to12mins)

16


InsUncUveAutomaUc,“GoTo”Style

FinancialPersonalityDiscovery:Situa5onalLearnedBehavior

BehaviorGap

BehaviorGap

FinancialDNANaturalBehaviorDiscovery

SkillsKnowledgeExperiencesEnvironments

SkillsKnowledgeExperiencesEnvironments

TheUniqueDNAStar5ngPointfor

EnhancedPredictability

Document,Monitor,Communicate,Educate

Re-PosiUoningtheDiscoveryStarUngPointtoNaturalDNAHardWiredBehavior

FinancialPersonalityDiscovery:Situa5onalLearnedBehavior

Document,Monitor,Communicate,Educate


ProcessforAdvisorsUsingFinancialDNAInsightsImpacUngEveryPhaseoftheFinancialPlanningProcess

FinancialDNADiscoveryProcess

AdvisorEQand

TeamDevelopment

Advisor-ClientMatching

Customized

CommunicaUon

TailoredPor8olio

ConstrucUon

DeeperandMore

ConsistentClientInquiry

Process

GreaterDisclosureof

Client:Goals

InterestsPrioriUes

OfferingClientCenteredSoluUonsTailoredto

StyleOngoingBehavioralCoaching

ComplianceMonitoring

23%paRevenueUplirfromClientEngagement

1.5%paonPor8olioAUM

Value


WhatYouSay,Isn’tNecessarilyWhatYourClientsHearRe-FramingCommunicaUonAssistsStrategyAdopUon

Copyright©2001UniversalPressSyndicate


CommunicaUonDNAReportsConnecttotheClientintheFirstMeeUng

1-PageCustomizedMee5ngGuideReport• Overlaysadvisor’sstylewithclient’sstyle• ProvidesinsightsforadvisortocustomizethemeeUngexperienceAddiUonalenterprisereportsareavailableforfirmuse.

1-PageCommunica5onDNAConsumerReport• Immediatelyavailabletotheclient• ProvidesinsightstocommunicaUonpreferencesandlearningstyle


UsingCommunicaUonDNA®forClientEngagementNavigateAdvisor-ClientCommunicaUonDifferences

Goal-SeZngOpportuni5es&Op5ons

Lifestyle

Engagement,Openness&MakingConnec5ons

So\tone&Safety

Stability

Analysis&Tangible

Informa5on


DNABehavioralManagementGuideReportHelpsAdvisorsGuideClientstotheRightSoluUons

Reportprovides:1.  Behavioraldifferencesbetweenclientandadvisor2.  Guidancefortheadvisortoadapttheirstyletotheclient3.  FinancialbehaviorbiasesandriskreporUng4.  ClientengagementmeeUngprocessandquesUons–relaUonship,financial

andinvestmentbehaviors5.  BehavioralIPS–aligninggoals,financialcapacityandrisk-takingbehaviors


YourAssessmentoftheClient’sCurrentPor8olioRiskProfileGroup

YourAssessmentoftheClient’sPor8olioRiskNeedGrouptoAchieveGoals

YourAssessmentoftheClient’sPor8olioRiskGroupbasedonCurrentFinancialRiskCapacity

FinancialDNANaturalBehaviorPor]olioRiskGroup(basedonRiskPropensityandTolerance)

FinancialDNALearnedBehaviorPor]olioRiskGroup(FromFinancialPersonalityDiscoveryorAdvisor’sAssessmentoftheclient)

OverallSelectedPor8olioRiskProfileGroup(SelectedbyAdvisorandClientbasedondiscussionoftheaggregateofallscores)

BuildingthePlanandIPS–SummaryofClientsSelectedPor8olioRiskAlignedtoGoals,Capacity


Advisor/ClientBehavioralCompaUbilityEnsureAdvisorKnowsHowtoAdaptasFiduciary


Disposition Effect Mental Accounting

Loss Aversion Pattern Bias

Fear of Regret Status Quo Basis

Risk Aversion Benchmark Focus

Consolidated View Herd Follower Over Trading

Instinctive Controlling

Optimism Bias Over Confidence

Newness Bias

Risk of Not Achieving Goals Can Increase Risk

- Taking

Need to Manage Expectations Down

Can Over-Influence Caution

Need to Increase Decision-Making Confidence

FinancialPersonalityInfluencesonDecision-MakingProacUveBehavioralBiasManagement


Rela5onshipOrientated

Results

Orie

ntated

FastPaced

MovesCarefully

•  ConsolidatedView•  OverTrading•  Op5mismBias•  RiskTaker

•  Spender•  HerdFollower•  Ins5nc5ve•  StatusQuo

•  RiskAversion•  LossAversion•  FearofRegret•  Disposi5onEffect

•  Saver•  MentalAccoun5ng•  PaIernBias•  BenchmarkFocus

FinancialDNANaturalBehaviorUniqueStyleMatrixIncludingBehavioralBiasesandRe-FramingCommunicaUons


FinancialPlanningInsightsKeyBehaviorstoNavigateinthePlanningProcess

HighScores=70%andoverMediumScores=31%to69%LowScores=30%andunder

RiskBehavior

27

SpendingBehavior

Goal-SeZngBehavior


Client’sNaturalBehaviorPor8olioRiskGroupBasedonRiskPropensityandRiskTolerance

Forthosewhoshouldtakenoriskandbeincash


Group 1 Group 2

Group 3

Group 4

Group 5

Group 6

Group 7

Pop. % in this category

<2% 2-18% 19-30% 31-69% 70-81% 82-98% >98%

Portfolio Structure

Capital Protection

Ultra-Conservative

Conservative Balanced Accumulation Growth Aggressive

AcceptableConservaUvePor8olio

AcceptableAggressivePor8olio

OnePor8olioRiskGrouping

Approach:1.DonotsettheRiskProfilehigherthantheRiskNeed(toachievethegoals).2.Buildthepor8oliowithin+/-1GroupingoftheNaturalBehaviorPor8olioRiskProfileGroupasitreflectsthelongterm“goto”defaultbehavior.Subjectto:(i)Reviewtheclient’sRiskNeed(toachievegoals)andRiskCapacity(financialability)(ii)Theclient’sLearnedRiskBehaviorMoUvaUons(experiences,educaUon,environment)

BuildingaBehaviorCenteredPor8olioWiththeClientMutuallyAgreeingtheOverallRiskProfile


Goals-BasedBehavioralPor8olioDesignStrategyAllocaUon

3Por8olioBucketsA“MentalAccounUng”Approach

OperaUngPor8olio(“PreservaUon”)

Preserveprincipal,generateincomeandminimizevolaUlity.Amount:Min6to12monthscashfordailyacUviUes(shorttermneedsandwants),upto3

to5yearscashforReUredPerson.

(RiskPor8olioGrouping1)

CapitalAppreciaUon(“AccumulaUon”)

ManagevolaUlitybutfocusonappreciaUontogeneratefuturepurchasingpowerforbuildingreUrementcapital(longterm

needs).Amount:5to10yearhorizon.

(RiskPor8olioGrouping2to7)

StrategicPor8olio(“SpeculaUve”)

DesignedtomeetspecialobjecUves,generatehighreturnsorcashflowandarelessliquid.Amount:Long-termhorizonandcanbelostwithoutreUrementdamage(longtermwants).

(RiskPor8olioGrouping5to7).

Subjecttolevelofcapitalandinvestmentexperience,educaUon


QualityLifeBehavioralAXtudesforPurposeBasedPlanning


AddiUonalKeyFinancialDNASummaryReportComponents

Advisor and Client Compatibility Matrix

DNA Ultimate Performance Guide


NavigaUngCoupleDifferencesFrankandMaryButler


Client/ProspectCompletesCDNAandFDNAthroughthe

Advisor’sCustomURL DNABehaviorSystem

Advisor’sCustomURLforCDNA/FDNA

CompleUon

DNADataavailablereal5meinCRMandFinancialPlanning

Sorware

CDNAandFDNAReportsAvailableto

advisors:

Advisor/TeamSeesDNAInsightsandScriptstoCustomizeInteracUonsforIncreasingClientEngagement

ReviewDatatoMonitorSuitabilityCompliance

BehavioralIPS:

HowAdvisorsareAccessingFinancialDNA®InAllPhasesoftheFinancialPlanningProcess


HowWillYouManageClientRiskComposure(EmoUons)?IneveryInteracUon,AnnualReviewandMarketVolaUlity


MarketMoodFirmDashboardforBuildingaMarketVolaUlityPlan


PowerRealTimeClientBehavioralManagementUsetheMarketMood™toSimulateRiskComposure

PredicthowclientsarereacUngtomarketevents(inrealUme).

Exuberant:GrowthePor]olioComfortable:Regularmee5ngscheduleWatchful:Educa5onopportunityFearful:Preventclientturnover


FinancialDNAInsightIntegraUonContact+Leadrecords


OpUonal:FinancialPersonalityDiscoveryAnnuallyAligningNaturalandLearnedBehavior

FinancialPerformancewith

FinancialPersonalityDiscoveryforrevealingsituaUonallearned

financialbehaviorsandpreferencesatadeeper

leveltobuildandreviewFinancialPlansand

InvestmentPolicyStatements–29quesUonstaking20to30minutes

FinancialPersonalityAnalysiscomparingtheNaturalDNARiskTakingBehaviorwhichremainsstableoverUmeandLearnedRiskTakingBehaviorwhichchangessituaUonally.


OpUonal:QualityLifeDiscoveryAnnuallyForPurposeBasedPlanningandAnnualGoalReview

QualityLifePerformancewithQualityLifeDiscoveryforSeXngGoalsbasedonIdenUfyingtheClientsCurrentStrengthand

StrugglesAreasforLivingaQualityLife–80raUng

Itemsacross8areastaking20to30minutes


OpUonal:QualityLifePlanningProcessForClientsinTransiUon

QualityLifePlanningProcesswithLifePurpose

DiscoverybasedonintegraUngaperson’s

Talents,Passions,UniqueGir,Vision,Missionand

Values-raUngItemsacross6areastaking20to30

minutes


BehavioralInvestmentPolicyStatementUpdatedforMaterialGoalandPor8olioChanges

1.  FormalizedagreementbetweenadvisorandclientoftheestablishedinvestmentobjecUves,horizons,process,policiesandagreedmandateforinvesUngapor8olio.

2.  IncludesanassetallocaUonbasedontheinvestor’sfinancialpersonality,riskaXtudesQualityLifegoals,requiredreturns,financialcapacity.

3.  ProtecUonagainstspurofthemomentemoUonaldecisionsbasedonshorttermmarketevents.


ChangingtheFinancialPlanningParadigmwithaBehavioralFinancePla8ormUsingFinancialDNA

Tradi5onalParadigm FinancialDNAHolis5cApproach

NewGenera5onofFinancialPersonalityDiscoveryandPerformanceMeasurement

SingularRiskProfiling(HighlySubjecUve)

HolisUcFinancialPersonalityDiscoverybasedonNaturalInsUncUveBehavior(HigherObjecUvity)

Measurementof16BehavioralFinanceBiases,RiskPropensityandTolerance,Por8olioGrouping1to7

StaUcReports MarketMoodDashboardforRealTimeBehavioralManagementtoMarkets

N/A CustomizedCommunicaUonKeysandAcUonSteps

N/A ComparisonofLearnedandNaturalBehavior

N/A QualityLifeInsightsforPurposeBasedPlanning

N/A AdvisorClientGroupReporUng

IPSandBehavioralPor8olioModels

SituaUonalQuesUonsandIntelligence,ExperienceBias

ValidatedPsychometricAnalysisStarUngWithNon-SituaUonalForcedChoiceQuesUons

BasicStand-AlonePla8orm PowerfulTechnologyIntegraUonwithCustomizedReporUngandBranding

43


DNABehaviorHowDNABehaviorCanHelpYourFirm?

DNADiscoveryProcess

FinancialDNAFinancialPersonality

ManagementSystems

MatchingAdvisoryTeamstoClientsandSolu5onsOffered

GrowEngagedClientsandAdvisory

Teams

DNATraining

DNAKnowledgeCenter

DNATechnologySystems

BehaviorDrivesFinancialPlanningPerformance

AdvisoryTeams

Clients

$

44


We use Financial DNA to better understand our client’s financial personality: Click on the below button to start your 15-20 minute process to uncover your financial personality. •  Client Communication style •  Behavioral biases •  Risk profile

StartFinancialDNA

ExampleofAdvisorWebsiteAdvisorsMarkeUngtoClientsusingFDNA

45www.financialdna.com/start


We use Financial DNA to better understand our client’s financial personality: Click on the below button to start your 15-20 minute process to uncover your financial personality.

StartFinancialDNA

ExampleofAdvisorWebsiteEasyProcessforClientstotakeDiscovery

46


FinancialDNAEnhancedFinancialDNADeliverables

Cer5fiedWealthMentor $370permonthBehavioralFinancePackage+FDNAWealthMentoringReports+BDNANaturalBehaviorReportsforTeam

FDNABehavioralFinancePackage $290permonth

AllCDNA&FDNANaturalBehaviorSummaryReports+MarketMood+OnlineTraining&Tools+OngoingSeminars

FDNAIntroductoryPackage $135permonthNaturalBehaviorSummaryReport

47


ROIIndicator Metric

FinancialDNAInvestmentfortheCWMPackage$3995peryear/primaryadvisordependingonpackageopUons,withenterprisevolumediscountavailable

Cost/clientperyear $30/client

DiscountonFinancialDNAatRetailALaCarteRates 77%

ClientValueofBehavioralCoaching 150bpsperclient/yearonAUM

AdvisoryFirmROIObjec5ves:

RevenueIncreaseover4years +100%

NoofEngagedClientsIncreasefrom15% +15%

AnnualClientValueIncrease +10%

ROI 51to100Umes,dependingonpackage

TheROIofImplemenUngFinancialDNACWMPackageforanAverageFirm

48


ToaccesstheFinancialDNAComplianceKitandformoreinformaUonaboutFinancialDNA:Contact:DNABehaviorInternaUonal5901-APeachtreeDunwoodyRdSuite375Atlanta,GA30328(770)274-0311

leon.morales@dnabehavior.comwww.financialdna.comwww.dnabehavior.comFollowusonLinkedIn:FinancialPersonalityInsightsand/orFinancialDNAonTwioer`

ContactUs

Financial DNA® · DNA Behavioral Management Guide Report Helps Advisors Guide Clients to the Right...

Documents

Transcript of Financial DNA® · DNA Behavioral Management Guide Report Helps Advisors Guide Clients to the Right...