Mapping Financial Genes

(August 2005) The financial services industry is a peculiar mixture of art and science. Crunching numbers, analyzing stocks, poring over financial data – that’s the science part of the business. Building relationships, interpreting client needs, motivating clients to act – that’s the art.

Is one of these more important than the other? I think so. You can’t be in this business unless you’re good at the science. But you can’t be successful without the art. Simply put, the better you are at the art of under standing people – what motivates them, what excites them, what scares them – the more successful your practice will be.

Over the past year or so, I’ve spoken to a number of high-net-worth (HNW) advisors and industry insiders and it’s clear the business is waking up to the importance of people skills. I’ve seen a number of educational systems, seminars, books and other resources emerge for HNW advisors looking to develop their people skills.

Investing in one or more of these resources makes good business sense. To that end, take the Financial DNA® Discovery Process, one of the most comprehensive, most effective systems that I’ve come across in my career. In a lot of ways, I think it represents something of a watershed in the way we think about the sometimes complex relationship between ourselves and the clients we serve.

The Financial DNA® works on a simple principle: each of us has our own financial personality – a way of making financial decisions and dealing with financial situations – that is different from everyone else’s. Reading this financial personality is like pushing a “fast-forward” button on your relationship with the client. That makes it easier to predict client behaviour and solve problems before they begin.

In practical terms, Financial DNA® is an in-depth personality survey that contains three elements. The first two uncover the individual’s unique personality to predict likely behaviours and reactions to stressful situations. The third provides an overview of the entire financial personality, charting it in terms of 18 “financial strands.” These surveys can be completed online and typically take 40 to 60 minutes.

“Advisors find the simplicity really attractive,” says Dan Brintnell, president of Harrington Lane Inc., the provider of the Financial DNA® system in Canada. As Brintnell explains, the entire system was designed to produce a clear, concise report that serves as a kind of “executive summary” on the client’s personality and expected behaviours. “At the end of the day, you’re left with a report that not only covers learned or ‘situational’ behaviour, but natural behaviour as well. This is the behaviour that remains stable over time, and reflects the core of who a person is,” Brintnell says.

According to Brintnell, this is the key difference between Financial DNA® and other personality profiles or psychographics-type systems. Because Financial DNA® reveals aspects of a personality that don’t change, the information provided is more accurate and reliable. “Advisors can choose the right clients upfront, motivate those clients to act more quickly and pinpoint the right financial decisions that the client can stay committed to,” Brintnell says.

That’s exactly how we’re using Financial DNA® in our practice. The system has helped us to acquire the right kind of client and provide them with more detailed wealth management plans that are ideally suited to the client’s personality. In a nutshell, we know what they’re looking for before we give it to them. Not only has that made prospecting and business processes more efficient, it’s made clients feel better about our service, and resulted in greater ‘buy in’ to our recommendations. All of this has been very good for business.

But as Brintnell explains, Financial DNA® is not a one-way street. “The advisors who have had the most success with the system actually complete the process for themselves first,” he says. “That way, the advisor knows how they interact with different client personalities.”

In this way, the end goal of Financial DNA® is not just to understand a client’s personality, it’s a diagnostic tool for your ability to manage and develop client relationships. How do clients respond to your personality? What can you do to encourage clients to fully communicate their needs to you? How can you modify your tone, your speech or even your body language to be more appealing to a particular type of client? All of these are important questions, with significant implications for the long-term viability of your practice. All of them can be answered quickly with this system.

This is the reason why I find Financial DNA® such an interesting development – and such a smart investment. At the HNW level where technical competence, business systems and excellent service are a given, the most attractive investment – the one that sets your practice apart – is an investment in you.

By understanding how you interact with clients in a given context (and how your team members respond), the more able you will be to provide the outstanding service and better results. If that doesn’t help your bottom line, nothing will.

Thane Stenner, CIM, FCSI, is a first vice-president and investment advisor with the T. Stenner Group of CIBC Wood Gundy. The views of the author do not necessarily reflect those of CIBC World Markets Inc. This article is for information only. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of Canadian Imperial Bank of Commerce and member CIPF.

thane.stenner@cibc.ca www.thestennergroup.ca

(08/08/05)