Technology is going a long way to meeting the financial industry’s quantitative, compliance and workflow needs — but can it also meet the industry’s psychological needs?

After all, behavioral finance suggests that an advisor’s job is as much about managing client behaviors as it is about managing their money, and tools like Riskalyze and Financial DNA allow advisors to glimpse into their client’s risk tolerance and financial outlook and design a portfolio based on their feelings.

Now, a digital tool from Denver-based AssetLock helps advisors react to changes in a client’s portfolio that may exacerbate their risk aversion or pessimism.

The AssetLock software allows advisors and money managers to discover a drawdown or investment loss within an account that will create an adverse reaction from a client, and then deliver messaging and advice based on that amount.

“The whole idea is to help clients stay invested,” says Jason Jenkins, AssetLock’s CEO. “Clients customize their own AssetLock level, usually less for conservative investors and more for aggressive einvestors. When the portfolio experiences a loss that approaches the client’s level, we ping the advisor, who then calls the client and does their job as a fiduciary.”

AssetLock is not a stop-loss strategy, it does not automatically sell any client assets. Instead, it acts as a monitoring notification service to give advisors and clients peace of mind that an account will not decline below a certain level without their knowledge.

Money managers also are able to see a client’s risk tolerance based on the AssetLock percentage they select.

“We’re trying to enhance the advisor, the money manager, by putting strategies and tools between them and the client,” Jenkins says. ”Investment is so personal, why not build a communication plan around a client’s downside threshold? For seem reason this doesn’t seem to be taking place between clients and advisors, so it makes sense to have a communication tool to help all of the parties involved.”

The software monitors accounts on a real-time basis, communicating with the advisor on a daily basis. When accounts reach a new all-time high, the AssetLock level adjusts.

Sarasota-based Global Financial Private Capital, an RIA with almost $6 billion AUM, is an early adopter of the tool.

“Client’s want to know how much money they’ve put into their accounts, what it’s worth now, and what we’re doing to protect it,” says Geoff Frazier, Global Financial president. “At the end of the day, it’s about behavioral finance, and this gives us another data point important to clients that we can communicate on. The end result is that tools like this are going to help advisors grow their business.”

The AssetLock tool uses a color-coded meter to describe activity within a client’s account — green for normal activity not requiring the advisor to contact the investor, yellow for when the account reduction comes within 75 percent of a client’s AssetLock level, and red for when the account reaches the asset lock level.

Advisors are alerted when an account drawdown comes within 75 percent of a client’s AssetLock level, enabling them to proactively reach out with targeted messaging during market downturns.

“We have a tendency to over-communicate, advisors especially communicate when things aren’t really meaningful,” Jenkins says. “We’re trying to give them tools to make sure that they’re only communicating when there are meaningful results or messages to report.”

Clients are given passwords to their AssetLock accounts so that they can log in and see their account statuses, and are given weekly and monthly messages from the software alerting them to new account highs, changes in their AssetLock level and dividend payments.

Jenkins said that the tool was inspired by neurofinance — the confluence of behavioral finance with the biology of the human brain.

“It really came from seeing how active MRI machines help identify where fear and greed come from,” Jenkins says. “They’re controlled by the limbic system, which in layman’s terms means they’re instinctual and reflexive. That means when people make investment decisions, they’re not using the outer parts of the brain responsible for reasoning, but the same parts of the brain that are triggered by eating, gambling and drug use. AssetLock is intended to assist advisors in helping clients to remain emotionally strong, to resist that first response so they can think reasonably about their accounts.”