Half A Helix Better Than None
What's astounding is that so few advisors over the last five years have embraced the Financial DNA system, and those who do embrace it mostly just go for small slices of a client's DNA rather than the whole double helix. According to Massie, about 1,000 advisors have used the system. Of that number, he says, 85% are using just the Path 4 or both Path 4 and Path 6.
That means only 15% of advisors go beyond the two introductory assessments to get to the two more probing tools, the Financial Directions Profile and Quality Life Insights Profile. These two assessments yield the most important data about clients and are likely to help lift an advisor to an entirely new level in a client relationship. The Financial Directions assessment takes about 30 minutes for a client to complete. That's on top of the 30 minutes it will take to complete the Path 4 and Path 6 assessments. But it will tell the client-and advisor-information unique to each individual client.
The Financial Directions report tells you whether the client wants you to provide guidance based on facts or emotion, and whether a client is likely to be confident of his financial decisions after being given advice in the style he prefers. It spells out whether a client wants to focus on budgeting, administration, order or saving. You learn whether a client is motivated to create only enough wealth to achieve life's basics or would like to be recognized as successful and be seen as making an important social contribution. You have insight into how strongly a client wants to avoid losses, whether the client is likely to become emotional after sustaining a loss or whether he is likely to focus on the upside in the face of a loss.
In addition, the Financial Directions Profile Report is combined with the results of the Path 4 and Path 6 assessments to provide a Financial Behavior Analysis Report. This report combines the hardwired personality traits that you were born with or developed by age 3 with financial behaviors and attitudes that you have learned. Massie says the hardwired personality characteristics are compared to learned behaviors in search of gaps. For instance, if a client's Path 4 and Path 6 reports indicate he does not want to take risks but his Financial Directions assessment reveals a penchant for risky investments, the gap between the natural hereditary and learned attitudes would merit discussion with the client. Of the 63 traits measured by Financial DNA, Massie says five to 12 gaps are usually discovered between people's hardwired attitudes about money and their learned attitudes.
Yet despite the trove of information revealed, the great majority of advisors using Financial DNA never get to the Financial Directions Report and still fewer ever utilize the Quality Life Insights assessment. Why? "It requires a behavioral change," says Massie.
Advisors Are Genetically Flawed
Being human, advisors are genetically flawed. Learning new methods and having the discipline to practice them is difficult. The vast majority of advisors will never develop the habits needed to utilize the Financial DNA assessment system. In fact, my guess is that the vast majority of advisors reading this article will not have the attention span and discipline to finish reading it and find out more about the system. And an even smaller number will follow through and actually implement it. It requires a major commitment and willingness to change your practice in a significant way.
Massie says the Path 4, Path 6 and Financial Directions assessments take one hour for clients. But you have to bet that when a client visits your office, you will end up eating lunch with him or spending time talking with him. Massie says reviewing the results of these three assessments takes about an hour. But you have to bet that you will be interrupted, need to answer the phone, or will check your e-mail while trying to analyze the assessments' results, and it might take two or even three hours to analyze the reports and jot down notes about issues you want to probe further with a client. For advisors who already spend time in plan preparation, the added work is less of an adjustment but requires adjustment nonetheless.
Moreover, using the system requires training. To administer the Path 4 and Path 6 assessments, you must take a two-hour Webinar. This costs $200 and certified financial planner professionals who take it receive two continuing education credits. To administer the Financial Directions assessment, you must attend a two-day training session, Wealth Mentor I, which is administered quarterly in Atlanta and costs $2,000. The Wealth Mentor II program is also offered quarterly and allows advisors to offer the full assessment program, including the Quality Life Insights Profile, a six-part financial personality assessment that provides an 82-page report with very specific details that an advisor uses to build a financial plan for a client.
Andrew Gluck, a longtime writer and journalist, is CEO of Advisor Products Inc. (http://www.advisorproducts.com), a Westbury, N.Y., marketing company serving 1,800 advisory firms.