Communication Dynamics

People who take the assessment will fall into one of four behavioral styles defined by DNA Behavior. There is the person focused on goal-setting, who is looking at opportunities. Second is the person who is focused on his lifestyle (meeting people and having fun). Third is the person who seeks safety and stability. And fourth is the person who’s more focused on getting information—an analytical type.

There are optimal ways for advisors to engage each of these types. For the goal-setter, an advisor will want to provide discussion and opportunities. For the lifestyle-focused person, an advisor will want to offer fun and openness (and graphics). The person seeking stability will need to hear more about security and feelings and will require more instruction, whereas the information-oriented person will require analysis, research and details.

You and your team also take the assessment so that you can generate a behavioral management report specifically designed to help you lead your client through the financial planning process. In essence, the report compares your style with your client’s and tells you how to modify your own behavior.

Let’s take a client, “Annie,” who’s primarily focused on her lifestyle but is also a goal-setter. Your own style is to focus on information—the analysis, research, facts and planning. But to talk with Annie, you will have to refrain from jumping right into facts, figures and details. Annie will respond best to open discussions, charts, graphs and seeing the big picture.

While there are many more aspects to the software, one of the most powerful is that it connects the client’s unique style to behavioral biases so you can understand how she might make decisions or react to decisions under pressure. Annie, for example, might score higher for certain traits: She may be more likely to sell winners and hang onto losers for too long. She may tend to be impatient for results and may sell at the wrong time. This means that as Annie’s advisor you will want to have a clear, understandable, long-term-view investment policy that she agrees to follow, even in volatile markets.

Though I find this software practical and useful, no one piece of software can make a difference in your effectiveness or profitability unless you commit to developing services and processes around it that focus on communication with the client.

Talk of better client communication seems to be in vogue this year, but I personally believe we need to spend less time talking about it and more time, money and effort in doing something about it. Try putting your communication plan into effect this year, then plan to track its effectiveness throughout 2015.

Deena Katz is associate professor in the personal financial planning department at Texas Tech University, a partner in Evensky & Katz in Coral Gables, Fla., and the author of several books on planning and practice management.