MARKET MOOD

Market Mood measures the current level of market fear or exuberance for each investor based on real-time market indices data or client’s specific portfolios. This tool provides easy-to-understand behavioral management tips and action items for investment advisors (and Fintech applications) to behaviorally manage or “nudge” their clients, in a way that is tailored to each client via automated customization.

Research affirms that investment advisors bring the most value to clients by stopping them from making impulsive decisions that change investment positions at the wrong time. Our own research tells us that, in typical market conditions, predicting the mood of clients can help advisors using the Financial DNA packages and DNA API bring an additional 150 bps to investors; however, in adverse volatility, this can increase to higher amounts.


RISK BEHAVIOR

How Financial DNA Delivers Risk Behavior Insights:

Accurately determining a client’s risk behaviors is critical for long-term financial planning success and Finra Rule 2111 compliance. The Financial DNA reports provide a step-by-step approach to determining the risk behavior of clients, couples, and advisors.

Each individual that participates in Financial DNA are assigned a Risk Behavior number of 0 to 100. This score is based on a blend of a person’s Risk Propensity and Risk Tolerance, where higher scores are associated with higher risk takers. The scores are normally distributed with a mean of 50, and a standard distribution of 10.

Financial DNA Risk Normal Distribution Curve

Risk Groups:

In addition to a numerical 0 to 100 Risk Behavior Score, participants of Financial DNA are also assigned a Risk Group. The risk group is used by advisors as a starting point in determining the ultimate structure of a client’s investment portfolio.

Individuals are grouped into one of seven risk groups, with portfolio structures ranging from Capital Protection to Aggressive and these insights are used to drive powerful questions between advisors, client’s and their family in building the ultimate financial plan.


ADVISOR CLIENT COMMUNICATION

What advisor client communication method do you use at your firm? Is it one-size-fits-all?

Each advisor on your staff and client you serve have preferred ways of communicating. Matching clients with the right team member to serve them is the first step to creating harmony. Next, your team will need to know how and when to communicate with your client base. Rest assured, there are DNA insights for that!

When having a critical conversation with a client, the setting, and the way the message is received will drive the mood of the discussion. DNA Insights uncover individual communication styles and how they interact. Firms leverage out-of-the-box Financial DNA reports included in our subscription packages and insights available in the DNA API to identify the right way to communicate with clients at the right time.

The best way to experience DNA, is to try it yourself. See if we can pinpoint your communication style.

Powering Advisor Client Communications with Behavioral Insights:

How do you prefer to connect with clients? On the phone? Email? Web meeting? In-person meetings? Just as you have a preference, so do your clients. The DNA insights predict the best method for advisor client communications. For instance, a short phone call, a lengthy in-person meeting, or a quick email with bullet points.


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