“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.”