A Handbook for the Modern Wealth Professional To Engage Clients

You’ve delivered a great presentation. What you’ve proposed makes sense (to you). You’ve provided the collateral that’s required for anyone to be able to make an informed decision about a course of financial action. Yet, there is inertia. An inability for the prospect to move forward, and this suspended animation can last weeks, months, years. "Client engagement for Financial Advisors", is about is taking the process of wealth professionals such as you and tipping it on its head so you can understand:

1. Why prospects have inertia;
2. Why appraising a financial situation is a fear filled roller coaster ride for the average person;
3. Why the process that is most important is: the delivery of knowledge in the most basic subject categories; and,
4. How you can truly engage each and every prospect with relevance and meaning for them to become not only engaged in their finances but to become the managing director of their finances.

https://www.amazon.com.au/d/B06XQDPP2F/ref=sr_1_1?ie=UTF8&qid=1500629824&sr=8-1&keywords=client+engagement+for+financial+advisors

Rethinking Client Engagement

Another thanks - this time to Financial Standard in Australia for this article

http://www.fsadvice.com.au/blogs/view/94327458

On "rethinking client engagement"

How Choice Channels Deepen Engagement

Great thanks to Australia's IFA magazine www.ifa.com.au for this recent article

https://www.ifa.com.au/news/17711-choice-channels-deepen-client-engagement-suitebox

Which of course is effectively an excerpt from my book

Client Engagement For Financial Advisors

The Great Engagement Differentiator

What differentiates great service? Great businesses in the eyes of their customers?  What determines your success with attracting and engaging appreciative clients?

(for more on client engagement buy the book Click to view Client Engagement for Financial Advisors )

Shawn Achor[1] tells us that “happiness” is the greatest differentiator. 

Research in the growing field of "positive psychology" indicates that when we engage consumers with positivity and in a manner which allows them to look at the solutions we offer (be it a product or a service), then their brains become more engaged, creative, motivated, energetic[2]: in other words they are more likely to engage with you and adopt the solution you are offering (that is buy from you).

Regardless of your views on “happiness”, engaging consumers with “happiness” and positive psychology, the thing that you do need to pay attention to is that the way consumers choose to do business with you and interact with you is changing.

The field of “wealth management” “financial advice” is one in which this trend is not only powerful but also an enormous opportunity.  The “disruption” in advice models and offers, the consolidation of the landscape of advice and the nature of client interactions makes “advice” ripe for opportunities for refreshing your business model.  Let me build the case for why you need to do just that.

The old model was predicated on the advisers total control of the information of “financial speak” and processes[3].  Now consumers not only have access to information they have assistance through businesses such as Vanguard, TD Waterhouse and any quasi scaled advice service or information portal.  A “google” search for “apps for financial advice” delivers over 9,000,000 results.   Scarier still is the recent development of an app where a consumer can consult a financial adviser for $10 a question with the view of bringing advice experts into someones world easily and efficiently and cost effectively.[4]  Will that even work, surely that does not suit your clients?

Well if your clients are in the 30-49 year old age group, then you might indeed have a concern.  It is this group that indicates that where there is an advice relationship, that only 1 in 2 are happy with it.[5]  This cohort cites the following as reasons for their “disconnect” with the relationship:

·       A lack of collaboration with the adviser so they feel in partnership

·       A lack of individualisation in the solutions offered

·       A lack of mobile capabilities that increase the convenience of engagement and interaction

·       And a lack of complete end to end solutions

The advice to businesses and individuals in this space can be applied to an array of businesses. In short a range of solutions that provides for enhance collaboration, process efficiency and engagement efficiency is what is required to be able to compete and differentiate.

Specifically, the initial and subsequent engagement needs to be highly personalised and convenient and must address the value to the client of their present situation.  Someone with “only” $50,000 to invest, may reveal that this $50,000 was delivered through years of hard work and sacrifice and hence it is the most significant journey they have financially been on. 

This is very much about empathy that is a fluid discussion not a formulaic process.

Secondly you must connect with mobility and socially with clients.  Choose your weapon carefully.  This is about what is the best way to engage with your clients initially and continuously that fits into their lifestyles, not yours.

And lastly becoming a central hub for your clients.  This means interconnections with other advisors perhaps that can be brought into meetings easily or other streams in your offer.

How do you package that up?  Because the above looks like a lot of hard work.

Well this is where you are definitely behind the 8 ball if you are only considering this now.  In 2014 Liz Moyer wrote in the Wall Street Journal[6] that businesses are “rolling out souped-up smartphone and tablet apps that let clients conduct video-chats with advisers” (amongst other services).    Citigroup private banking arm back then was testing a new video-chat function with selected clients and planned to make it broadly available to customers. (Which they did).  Moyer wrote that the customers can use the:

“iPad app, which the bank introduced in February, tap a tab on the app screen and initiate virtual face-to-face conversations with their personal bankers.

The software also allows both client and adviser to see data about the client's portfolio simultaneously, or to see possible investment outcomes in varying market scenarios. "You can have a shared experience. It's the kind of interaction between client and adviser that we've been pushing toward," says Tim Tate, the private bank's global head of client management.”

And if that’s not suggested to you that perhaps you need to consider easier, efficient collaboration via digital means, perhaps this will:

“Investors could move their business elsewhere if firms don't respond. A survey released in June by consulting firm CapGemini and RBC Wealth Management found that 57% of affluent people over age 40 and 80% of those under age 40 would consider leaving their wealth-management firm if digital services weren't offered. The survey defined digital services as functions that are Internet or mobile-based, including social media, email and video.”[7]

So what is the great differentiator?  It’s advancement in engagement.  Simply that. 

Engagement that suits a customer, that is efficient, engaging, collaborative, compliant.

---

[1] http://goodthinkinc.com/resources/books/the-happiness-advantage/

[2] http://www.forbes.com/sites/kathycaprino/2013/06/06/how-happiness-directly-impacts-your-success/#4d0658517ae2

[3] Accenture, 2015, New Realities, New Approaches, Changing the Client-Advisor Relationship in Wealth Management.

[4] http://www.sbs.com.au/news/article/2016/04/11/app-offers-financial-advice-under-10

[5] Accenture, 2015, The Greater Wealth Transfer

[6] Moyer, Liz, Wall Street Journal 11 July 2014 “ A New Wave of Apps for Wealthy Investors; Wealth Managers Add Web Tools as Online-Advice Firms Like Wealthfront and Betterment Grow

[7] Moyer, Liz, Wall Street Journal 11 July 2014 “ A New Wave of Apps for Wealthy Investors; Wealth Managers Add Web Tools as Online-Advice Firms Like Wealthfront and Betterment Grow

Excerpt from the book "Client Engagement For Financial Advisors"

Of course for more....you can access the complete guide at the following link:

Click to view Client Engagement for Financial Advisors

There has been much research on why people seem unable to make financial decisions in their best interests with some of the acknowledged causes being; an inability to cope with complexity, choice confusion, herd mentality, social proof, an inability to look forward and to forward plan, a lack of understanding of basic and fundamental concepts like compound interest and cash-flow management, genetics (yes I’m serious), behavioural fundamentals and personality including self-control, and sadly but unfortunately a reality, that some people through socio-economic circumstances, background, upbringing and situation influences are trapped in a “just getting by” whirlpool.

Is it any wonder therefore, that despite your brilliant proposal, that a response of “I need to think about it” is received?  That people do anything at all to move forward is somewhat of a miracle!

What are some of the tools and techniques that professional advisors can employ to assist in this process of decision making for a client?  And importantly to set a positive context in which people can make decisions.  Work by Klement and Miranda (2012) attempted to solve for this very equation.[i]  Predominantly they looked to provide advisors tools to accurately assess an investors risk preferences to help therefore in reaching the goals of the investor but at an appropriate level of risk. 

People are in fact disengaged with advice because of a complex interaction of: behaviour, socio-cultural influences, biology and cognitive skills.  Therefore, as we have stated, it is the way you understand and manage your prospects and their emotional responses that will determine their willingness to engage with you, to make change.  The disengagement, with ones’ financial affairs, that we have explored is not a deliberate choice.  No-one wakes up in the morning or has as a daily mantra “I am deliberately avoiding dealing with my financial past, present and future”. 

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[i] Klement, J., & Miranda, R. E. (2012). Kicking the habit: How experience determines financial risk preferences. The Journal of Wealth Management, 15(2), 10-25,7. Retrieved from https://search-proquest-com.ezproxy.lib.swin.edu.au/docview/1034599867?accountid=14205v

A handbook for the modern wealth professional

I'm pleased to provide the link to my newest publication, a handbook for client engagement for the modern wealth professional.

Click to view Client Engagement for Financial Advisors

Client Engagement for Financial Advisors - launched and live

After a hiatus from this blog, a foray into FinTech (which is still going!) I have shifted back towards delivering tools and techniques for client engagement with a particular focus on the needs of the modern client and have done so with gusto with the launch of a handbook for the modern wealth professional.

The link is included here and I look forward to engaging with you to assist you on your journey towards positive client engagement.

Is love the answer? The bizarre love triangle.

There is indeed a triangular theory on love. Sternberg, posited that love, is formed, in all instances on the emotions of passion, liking and commitment. All when combined you have what we all seek, consummate love.

For me, I approach love from two perspectives. First the biology. How does it happen, what is it's purpose, it's biochemistry, it's role in adaptation. And secondly, it's role in well being and ultimately the meaning and purpose of life. Is the need and search for love an innate biological process? Or is it something more?

Well despite many pseudo psychologists quoting examples of the love hormone oxytocin, there is in fact no single hormone or process that can account for, deliver, or be responsible for the many facets of what we know as love. Indeed that very hormone can make us feel the best of human emotions, and the worst. It can indeed promote what we consider negative feelings such as jealousy. There is a difference between love and infatuation, between losing oneself and control and being calculated and controlling (in love and in life).

Indeed many of us may have been on the receiving end of a type of love, ludus. The architect of ludus sees love as a game, a test of feelings and attraction. It is interesting to note the type of personality, perhaps a disorder here. This type of person sees it as a game. It is emotional manipulation. Having more than one partner or picking fights for reaction purposes. Often associated with childhood experiences of loss and abandonment by maternal or paternal figures, a pattern is set that becomes normal for the protagonist, but bizarre by any other measure.

For many, beyond the physical allure, the chemical overload, is the matching of values and reciprocity of affection. It's a complex cocktail that no mixologist has yet mastered and that's what makes it so surprisingly intoxicating when we come across it.

In those circumstances, self awareness, self disclosure, transparency, are all critical ingredients to stability of love, of the initial attraction. And sustainability is not the gifts that we liked, the expensive dinners, but it is the relinquishment of a degree of control that can only come when one is accepting of themselves. That's what makes love so hard to find. Know thyself is not something we've all yet mastered.

There are many theories on love. Many friends with advice. But in the end it comes down to whether in a partnership each person has the ability and the tools to reveal the magnificence of the ideal person they are with, and whether or not that person is ready to be revealed.

It is the Michelangelo phenomenon, where that statue, that magnificence is waiting to be released from the block of stone in which it sits. The sculpture is always there, but it takes a partner with the right skill to reveal it. And the stone needs to yield in the right way.

Love is the answer. The beauty and magnificence to find it is within all of us.

What is mindfulness? (And will it drive you crazy?)

I purchased a mindfulness colouring book recently. My mind moves often at a 100 miles an hour (yes I know I'm not special in that regard), and focus on the moment, clearing my thoughts, applying my filter(s) can be at times, difficult. So concentrating on the task at hand, surely with Faber Castells at the ready, would solve the lack of "stillness" in my daily routine? Sadly no. I've not had that much self inflicted frustration thrust at me for quite some time. Of course I didn't choose an "easy" selection of graphics, and well I wanted to "blend" colours and not have it look like a 3 year old had completed the templates. Perhaps I was missing the point?

There are different approaches to mindfulness. A great way to explain what it actually is, is probably to start with what it is not. When we don't pay attention to what is going on around us, when we operate on automatic pilot, when we go through the motions, this is indeed the opposite of mindfulness. And we have all done it.

I can't tell you how many times I have driven into my street, and can't actually remember the drive home. Perhaps considering Melbourne or now Sydney traffic, that's a good thing. But imagine if that's the way you felt about a meeting, and interaction, or your day? In other words where we really haven't paid attention to what we have been doing or saying. Rather we have just reacted with ingrained habitual responses. Without mindfulness we can not create changes in how we live our lives, which is required because of the constant interchange and exchange of experiences that comes at us each and everyday. Without mindfulness we can. It change patterns that possibly are not serving us well.

I have triggers. Throughout my life they have led to a pattern of reacting to things. The reactions have manifested differently depending on the different experiences encountered, but nevertheless they are the result of patterns. Sometimes the reactions are needed and beneficial. Sometimes they have been rather destructive. The reactions are not the problem. The habit and locus of control relinquishment is.

Has mindfulness helped? Well I don't think I'd be writing this without it.

So what is mindfulness? It's paying attention, it's being aware. It is a style of thinking. It's being actively invested in the experiences that come your way, and dealing with them in the present rather than applying old filters and patterns.

Buddhist meditation teaches one to detach your own personal filter from the experience so that the automatic reaction does not occur.

It's not easy! It is about firstly focusing your attention to the experience at hand and then being open, accepting, curious.

Researchers have demonstrated that self awareness levels and positive emotions are associated with the ability to be more mindful.

But to break old habits, when you are practising mindfulness, Shapiro and Carlson in their article "The art and science of mindfulness, integrating mindfulness into psychology and the helping professions" (American Psychological Association, 2009) listed some elements that being mindful requires. They posit that to have success in mindfulness one must be non judging - be impartial to the experience, non reactive - forget and let go of habitual responses, trust - trust you are in control of the experience and also they identify having patience as key (just to name a few).

For me it was very much about transferring the quiet stillness I feel when running track, into everyday experiences, and not reacting in patterns of the past. It was also about appreciating that what was happening now, in the moment was not something that was happening to a scared helpless 11 year old boy. And as such triggers become, well, less of a problem. Letting go of some patterns is not without it's trauma.

What's the point of it all? Well there is a connection to concepts of flow, to peak performance for individuals and for teams. There's connections to happiness and well being. There are connections most profoundly to living a better life and being closer to the person whom it is you want to be.

That old adage exists : of playing the movie of your life, and whether you are proud or not. Luckily for anyone reading this, you can throw the script out if you don't like the direction the story is heading and rewrite it. It's never too late.

Time for positivity?

The bandwagon has arrived and I'm jumping on. Or so it may seem. It appears if anyone and everyone who has read an idiots guide to positive psychology is turning themselves into key note speakers, quoting the same studies about cortisol and oxytocin and about the amygdala and neuro plasticity. And you know what......good luck to them. If they can earn a dollar and possibly get some inquiring minds to investigate positivity in their own lives, well then kudos to them.

But make no mistake, what they are espousing is nothing new. Theories of happiness and well being, and what delivers these often subjective measures of life satisfaction have changed little since ancient times and the days of philosophers such as Socrates, Plato and Aristotle.

Socrates believed that the quest for happiness was only delivered by knowing oneself, or in other words by self awareness of self and virtue. This was expanded on by Plato who suggested that that awareness needed to be beyond the sensory self and in fact required a deeper investigation. And Aristotle looked at values, self discipline, and the balance of virtues in a quest towards the good life.

As theories expanded through the enlightenment, the 50s, and then with the humanistic psychology movement, one of its guardians Maslow, entitled a chapter of his 1954 book (Motivation and Personality) : Toward a Positive Psychology.

So what of this modern thinking? This new positive psychology movement that talks about the left prefrontal cortex of Buddhist monks lighting up when they reach a state in meditation? What of the biochemistry of emotions?

Well it's new science. Assisted by technology, that supports the theories around happiness and well being. Yes, oxytocin is associated with social bonding, yes increased dopamine is associated with the experience of happiness and yes the brain can change during our life as we explore different skills and we can create new neural pathways and these pathways can be plentiful when we meditate or practice skills such as playing or learning music.

But here's the rub. None of these positive effects occur without individuals actually doing the work that is involved with self exploration towards self assessment and awareness. It takes work on behalf of the individual to investigate their positive self, to create plans for growth, foster relationships, to regulate behaviours, to find purpose in life and to strive to master ones environment.

Chanting "serenity now" will not deliver eternal happiness, set oxytocin flowing through your viens, light up your left pre frontal cortex or create new neural pathways.

A lot of hard work and self examination just might. So take the next presentation you see with a grain of salt, with curiosity, with critical thinking and with a notepad to write down the suggested actions you might take personally to develop positivity in your world.

If there are no suggested game plans, strategies or processes, well then seek answers from someone who has lived the journey. Not just from someone who has read a book.

The Psychology and Benefits of Financial Well Being and Advice

Financial planning, and the professionalism of the industry is under challenge. The challenge is not from existing clients who are actively engaged in the advice process. These clients overwhelmingly regard their advisers in the highest terms. In fact studies indicate that as a means of rating their advisers the average financial adviser attains net promoter scores in the 50’s. Further, advisers who we would regard as at the top of their game, who have developed and deliver a client centric experience, tailored to the researched needs of the individuals receiving the advice score in the 90’s.

Rather, the challenge comes from a combination of sources as the industry undergoes the FOFA series of reforms aimed at increased professionalism and improved quality of advice and to an extent this has been driven by consumer dissatisfaction and regulatory concerns over standards within the industry . What has eventuated, with this focus on the industry, has been an illumination not only on examples of best practice but also shone a light on practitioners who were not making the grade. That is what a reform process can deliver and what’s important to remember and to convey to consumers is that the vast majority of advisers enhance the lives and financial well-being of Australians.

The well-being of individuals, has become a measure of the societal progress of populations alongside measures such as GDP and life satisfaction measures focus on an evaluation of the individual’s life, for example, by asking “Overall, how satisfied are you with your life?” Individuals arrive at a summation after considering a number of important aspects such as health, family life, social relationships and finances . It follows then, as Irving (2012) points out, that Financial planning goes beyond the giving of insurance and investment advice. The process of financial planning delivers a strategy that takes into consideration all aspects of lifestyle, goals and requirements to help individuals reach their financial goals effectively and efficiently. The process of financial planning when delivered in a sequential, manner according to Irving :

• guides individuals in a goal oriented and systematic way;
• formalises behaviours for accomplishing outcomes and;
• provides a means of assessing progress.

Looking deeper at what drives human behaviour, the work of Lawrence and Nohria , identifies at least four hardwired innate drives that shape our behaviours and choices. Those elements, the drive to acquire, learn, bond and defend, fit neatly into the advice process as advisers educate clients as part of a discovery process to illuminate what is important to the client, and provide strategy solutions that allow clients to set a foundational platform to build towards their well-being goals and desired outcomes.

It flows then that as summarised by Irving (2012), the provision of best-practice financial planning is likely to have positive influences on individuals’ well-being and life satisfaction. The actual process of planning and the manner in which it takes into account goals, wants, values and motivators is core to not only the success of the planning outcomes but the overall well-being of the client.
Crucial then, to maximise the outcomes of the process, is to unpack each step of the financial planning process and discover what best practice looks like, what the client experience is and what it needs to be during the process and how businesses can deliver repeatable, sustainable and measureable processes to enhance client outcomes.

Professionalism embodies the notions of relationship quality, communication and ethical practice , so why has the financial planning industry been unable to enshrine the concept of professionalism in the hearts and minds of consumers? The process of financial planning provides a key to answering this question. The traditional process for financial planning has at its core a simplicity and an implementation that utilizes a prescriptive software illustrated approach that does nothing to unlock the mystery that is the black box of the advice process.

What’s missing here is the positioning and context of how the process will in fact make a meaningful change to an individuals circumstances to obtain the outcomes that are important and relevant to them. The focus is on a service and not on a collaboration. Some advisers however have taken this process and created models that emphasise a focus on values and motivations .

What has occurred with these leading advice firms is that they have unpacked the advice process and connected it, demonstrably, to the outcomes the client wants. This has meant a connection illustration where the client is bonded with people ‘like’ them. Using the concepts of social proof and liking (whereby people will do things they see other people doing, particularly those people they can associate with ie: like) these businesses explain the financial planning process in ways that connect it to a path others who have gone before them have travelled. Thus the process becomes less feared and more likely in the clients mind to be able to deliver the outcome that is desired.

There is value and benefit for all parties when a process towards best practice financial planning is positioned in this way. The process has positive impacts on well-being and satisfaction with life because it addresses lifestyle aspirations, values and goals . The methods of best practice positioning of the financial planning process can be summarized into client experience checkpoints that businesses need to enact if they are to be successful in delivering the entire process and having buy-in from the client to do so:

• the firm has a concept of the types of clients they can specialize in and like working with
• the firm develops capabilities to deliver needed specialized services and resources to their desired client set
• the firm positions the typical outcomes these types of clients have in the messaging and value statements they make about the services they offer
• the firm takes new clients through a process where client stories are illuminated so that the prospective client can associate and relate to the outcomes produced
• the firm takes the time and provides the resources for clients to participate and collaborate in the advice process

Increasingly then firms delivering best practice advice are utilizing techniques and tools such as mind maps, lifestyle questionnaires, wealth indices, personality profiles and wealth choices diagnostics, to engage clients, set benchmarks for communication, engagement and outcomes and in so doing are winning the hearts and minds of clients and delivering not only financial but psychological well being outcomes.

According to the Financial Planning Association the steps undertaken by a professional adviser when advising a client are :

1. Defining the scope of engagement;
2. Identifying goals;
3. Assessing the clients financial situation;
4. Preparing the financial plan;
5. Implementing the recommendations, and;
6. Reviewing the plan.

From a client psychology standpoint at each stage of the process can be attached to an underlying factor in positive well-being. Irvings 2012 work in this regard is substantial and we have expanded further here to explain exactly how clients are feeling at each point of the process.

1. Defining the scope of engagement; This promotes positive well being as the client starts engaging with basic life tasks: clients feel competent in managing everyday life and can take advantage of new opportunities. They can organize their life, work and home situations to match their needs and values. Known as ‘environmental mastery’ .

2. Identifying goals; Clients acknowledge they have goals for their life and develop a sense of direction in working toward them. They have beliefs that support a sense of purpose in their own life and life generally .


3. Assessing the clients financial situation; A realistic appraisal of a current state of affairs and a desired state of affairs reduces (potentially) the stress and strain of financial concerns, particularly if the client can see themselves working towards minimizing the gap. As a result they can feel good about where they are at financially and accepting of both strengths and weaknesses.

4. Preparing the financial plan; The plan is the enabler of the client, with one of the major benefits of long term planning is that it enables clients to start to compensate for a lack of resources and to maximize the possibility of even achieving better outcomes than people who had those resources but didn’t make a strategic plan.


5. Implementing the recommendations; As Irving (2012) notes the implementation process sets in train the progress towards the pre-identified goals. Further, enacting positive financial behaviours is an important component in overall well-being

6. Reviewing the plan; encompasses all of the above steps, and re-inforces the positive progress and psychological benefits of the process.

Knowing these processes is not enough. What leading advice businesses do at each step of the process is to stop, review, clarify the client experience and reinforce the progress. They use claims assistance guarantee promises, client assurance messages and formal assurance communications. Further they have embedded into their client process touch points that each member of the firm understands are crucial in delivering a positive client experience in line with the journey through the financial planning process steps.


References

Kym Irving 2012, The Financial Life Well Lived, Psychological Benefits of Financial Planning, Australasian Accounting Business and Finance Journal

Paul Lawrence and Nitin Nohria 2002, Driven : How Human Nature Shapes Our Choices

Creating positive outcomes for the life insurance industry in Australia

A lot of focus, rightly, has been on conversations with risk advisers on how best to engage the LIF reforms to maximise the security and longevity of a risk advisers proposition, if their model is to be adversely affected by the pending changes. I say “if”, because the reality is, that advisers who already have adopted a hybrid model, initially see very little impact if any at all, as a consequence. However there are a significant number of businesses and individual advisers who have written under the model that life insurers have provided and it is those advisers, especially newer entrants and aspiring advisers who will, (yes that’s a definite), be adversely impacted by the reduction in their income unless they adapt quickly to the changes. The questions that still need answering are: where are the positive impacts to the end client and what can be done to address the suitability and quality of strategic advice as highlighted by ASIC report 413?

In a surprise to many (if my reading of social media is correct), life insurers are not the winners from the LIF reforms. Life insurers are reliant on advisers and without a sustainable and in fact growing adviser force, life office insurance sales via advisers may fall. It’s a simple equation, less advisers equals less new business. Surely the saving grace for life insurers is the reduced commission payable?

Simple maths debunks this thinking. For arguments sake, let’s say that currently 80% of new business is written on upfront commission and that, that upfront commission averages 110% with a renewal of 10%. After 7 years the life insurer has paid out 180% of the policy premium. (It’s actually more when you factor in premium increases but let’s call it square on that point). Now take the LIF regime and let’s say that all business is written on 80/20 in year one. After 7 years the life insurer has paid out 220% of the policy premium. It’s worse for the life insurer on level commission, for at 30% the life insurer after 7 years would have paid out 240% of the policy premium. So, where are those premium savings for consumers going to come from? Reduced lapses? Possibly.

When it comes to lapses, most insurers have been working behind the scenes dealing with lapse rates at an individual adviser level. Lapse rates for some insurers are the best they have been for a while. Others are finding it difficult. Should LIF reduce lapse rates there would be some assistance towards premium reductions, mitigated by the overall increased cost of acquisition (unless that cost is improved by efficiency gains). It would be better if people didn’t claim! The reality however is that claims, especially in the disability space are increasing and should that trend continue, premiums most likely will increase.

If you are working in a life insurer at the moment, there certainly isn’t champagne dripping from the taps. However what responsible life insurers are trying to do at the moment is:

• Improve policy onboarding efficiency
• Develop new product to meet the needs of advisers and policy holders
• Provide mechanisms to assist advisers in their businesses : in regard to engaging and retaining clients and maximizing conversion rates
• Assist new advisers progress to best practice

None of the above except for the last point, deals with enhancing quality strategic advice, and for that education programmes and technical sessions are being built, assessed and placed in diaries with associated learning materials and in field tools. It’s this combination that is needed to draw advisers to dealing with the disruption: getting smarter, getting more efficient and getting deeper engagement (with advisers from the life insurers perspective and with the client from both views). It is also one that supports a growing adviser force, the key ingredient for a positive impact on consumers let alone life insurance company sustainability.

So are the LIF reforms positive? That depends on how you measure success.

If it’s from the customers view and that view is predicated on the need for dramatic premium reductions, then that is possibly not a reality. If it’s from an income perspective for the life offices or advisers, then that journey is a longer one and has the aim of long term sustainability. If it’s from a higher standard of advice through education, that is a progression and requires work on education standards and programmes.

However, if you do measure success as a progression then maybe professionalism and what I mean by that is the definition and norm associated with fee for service, then, maybe this, LIF, is a small starting point for that progression. Personally I am not sure if I agree with that definition. I can see models (and have seen) where insurance with adjunct services such as estate planning and cash flow management are highly valuable and fee generating services that clientele will be happy to pay for.

For someone however who wants an average premium to protect their family, will the remuneration without an additional fee be adequate compensation for an adviser to adhere to the tenants of quality strategic advice? My modelling suggests no (based on current advice processes), and without that adviser being able to service that client, where will that client turn to and will they get suitable advice?

That is the key worry for retail life insurers and advisers and should be the key concern for our legislators. How advisers and life offices work together on this point to find advice and product solutions that not only sustains but grows advice businesses is the real challenge and focus for the coming changes. Efficiency of engagement, application, policy maintenance and communication will win this challenge for life insurers and advisers alike. It requires collaboration and engagement between the insurer and the adviser. That’s a very positive outcome.

I wish I was (still) a financial adviser.

Right now as I write, I'm sitting on a plane, about to take off, bound for Brisbane, Australia, to complete the final two site visits (of the six I had to do) as part of the judging process for the 2015 Adviser of The Year (That I'm fortunate my company Zurich sponsors). I'd wanted to record the journey of the judging process (and the semi finalists) in a blog in a similar way to the Million Dollar Round Table diary I kept in June of this year.

Alas, time not only escaped me, but I also could not find the appropriate words to do the advisers who had opened up their businesses (and their hearts) to me, justice. Such is the serious that I approach this role with and the care that I believe one must take throughout the process.

As I reflect now, however, I can't help but think how much I miss being an adviser.

This may seem a strangely "out of touch" comment, especially considering the media, regulatory and self imposed scrutiny that our profession is facing and the significant changes for advisers and insurance providers that are set to be implemented in 2016. I am however neither out of touch (I have spent countless hours with advisers discussing the changes, and even more time modelling the financial and advice consequences to consumers of the changes) nor overly romanticising the advice profession. Rather I am appreciative of the value that financial advisers add not only to transforming the lives of their clients in the most positive of ways, but also how dramatically they protect the community (that includes you, our bureaucrats, our politicians) from a heavy burden from having to cater for a populace ill prepared for life events.

It is something like the Adviser of the Year judging process that makes you realise how deeply financial advisers care for their clients.

Now that feeling of taking a client to a place where they feel secure, where they have a solid foundation to build towards their personal dreams and they have "the freedom to say yes" (thanks to Chris Browne and Rising Tide for that one) is something I dearly miss. However I can do it no longer. Just like I do with the Adviser of the Year entrants, I did with my clients, and I become heavily emotionally invested in their story and journey. It is something that financial advisers do daily, and when you do so with so much passion there is no room to do things by halves. For me it was emotionally devastating to lose a client through death, something which I had prepared them and their families for financially but something they and I were never, could never be emotionally prepared for. I miss my clients. I miss Grace, I miss Jaclyn and I miss Bob, clients who passed away in my final year of advice. I miss Annette and Gary, clients (who I still see) thriving with their family and their life plans : I miss that weekly check in we had. I hear the stories of the Adviser of the Year participants and how deeply they are invested in their clients dreams and how much they have contributed to making those dreams a reality.

It takes skill to do this. Discipline. Courage. Process. Passion. It is what all the Adviser of the Year participants have.

I think of my sister, who is a doctor, a paediatric emergency specialist. I think of all the banged up kiddies she sees. The hundreds of thank you letters and cards she gets from parents, and I wonder what is in your make up that doesn't make you go crazy? What emotions she must feel? She tells me she detaches it when on duty, she has to. Then in her quiet moments she reflects.

For financial advisers, they don't detach. They are 100% of the time emotionally connected with their clients. I don't know any financial adviser who detaches emotionally when with a client (or afterwards for that matter). I see it in their meeting notes and given life in their staff. I see it in their client stories.

I wish I could do it again, but I cry way too easily. I'm so lucky that Zurich is so heavily invested in the advisers of the Adviser of they year and I get to stay connected through this process and then get to share via Zurichs education series all that I see.

So as a precursor to the new tools and presentations that will be delivered by Zurich post this 2015 journey, I say hats of to all the financial advisers who love their clients, who say to me they "can never imagine doing anything else, or ever stopping". Who in the face of ever changing landscapes, continue to deliver positive client outcomes that change an individuals life for the better, a families world for the better and make the communities they work in stronger, connected and spirited.

Take a bow.

Creating a Climate of Mastery

When we think about creating a winning culture, during both periods of success and a culture that carries through in periods of adversity, too often the basis of that “culture” is on the end outcome, the goals. That seems to make sense. There is a target to achieve, a competition to win, a league ladder to top.
What is missed with that approach is the achievement motivation of the individuals and the team. This refers to the efforts to master the task, with excellence, to overcome obstacles and take pride in exercising talent rather than a singular focus on the end outcome. Consequently the hallmarks of high achievers are that they select challenging tasks and persist in the face of failure.

What we know from sports science is when we as leaders can provide task-oriented feedback our “players” perceive the motivational climate to be more mastery orientated and less based on ego-orientation (a key facet of a goal based motivational climate), (Gershgoren et al, 2011).
This approach is often lost within sales team cultures. Too often the win at all costs attitude permeates through observation, modelled behavior and rewards aligned to the end goal that ignores attitudinal shifts towards a high ego-orientated state, that ultimately leads to attributions of success primarily to an individuals proficiency and attributions of failure to those other than the individual. In other words a blame culture, win at all costs, and ultimately a culture that does not thrive in the face of adversity.

This creates a problem for those entering such a culture. These “high achievers” have a fragile hold on success. For the new entrants whose competency at tasks may initially be low, can without initial success demonstrate a maladaptive behavior pattern in that faced with now being able to compete they, reduce their efforts, cease trying or make excuses. However as the blame game is one that perpetuates in these climates, they shift to tasks that are guaranteed to provide success and challenge new ways, new methods, fight change and fight progression and avoid peer evaluative feedback. In fact they don’t cope with feedback very well at all.

What motivation theories tell us is that to build a culture of achievement orientation, a climate of mastery, leaders in organisations need to become better at focusing on task mastery and feedback that builds confidence in an individuals management of the task at hand rather than a singular focus on the end goal.

Weinberg and Gould (2015) provide these guidelines:

• Set appropriate tasks aligned to progression towards mastery of a subject
• Emphasise the task goals and downplay the outcome goals
• When providing feedback ensure that attributions are appropriate. In other words focus on what the individual can control from a task perspective and ensure they take responsibility of task achievement and non-achievement.
• Enhance the perception of competence and control for the individual.

Critically this approach aligns with studies of organisational behavior such as the groundbreaking working of Amabile and Kramer (2011),that provided the keys to positive work culture. It was identified that clear tasks, with appropriate encouragement, resources, feedback, transparent leadership and celebrating the small wins (task achievement) were vital ingredients to developing a vibrant supportive and winning culture.

We as leaders directly and indirectly create motivational climates. If we do not give this influence we have any thought or planning (on a daily basis) we can unconsciously and irrevocably create a climate that focusses on blame, that is siloed, stagnant and incapable of reacting to challenges that require different thinking and approaches.

A new game plan is needed, one of confidence in the ability of our players to carry out the required “plays” and is achieved because they understand their roles, their tasks and through that clarity they have mastered the set plays and are ready for the challenge.

How to Build Consumer Loyalty and Advocacy In Financial Advice.

We pay more for brand names. We pay more for and are advocated of brands that have emotionally connected with us. The richer the emotional content of a brand’s mental representation, the more likely the consumer will be a loyal user. This thinking is just as relevant for financial advice as it is for toilet tissue and car tyres. Puppy dogs chasing a roll of toilet paper and the piece of mind of safety on a wet road have less to do with the end product and more to do with feelings and emotions.
Understanding, therefore, how people think is a critical factor in building consumer loyalty and advocacy. So just how do we make decisions and what occurs in peoples minds to help them evaluate situations? What do we need to know about how peoples minds work?

“Cognitive control and value-based decision-making tasks appear to depend on different brain regions within the prefrontal cortex,” says Jan Glascher, lead author of the study and a visiting associate at the California Institute of Technology in Pasadena, referring to the seat of higher-level reasoning in the brain.
In normal brain functioning people : a valuation network in the brain auto computes what's good and what's bad, before the person concerned has a chance to consciously understand the decision making process has occured. It is quick. It is intuitive and it is automatic.

This highlights the complexities in dealing with customers where you need them to make a considered rationale choice. The choice has less to do with the rationalities of your proposal and more to do with how they feel about you and your brand. In short they have a gut feel about what is good and what is bad for them: and if you have not connected with them then that good choice (rationally) seems the uncomfortable one.

Most people believe that the choices they make result from a rational analysis of available alternatives. In reality, however, emotions greatly influence and, in many cases, even determine our decisions. In a book, Descartes Error, Antonio Damasio, professor of neuroscience at the University of Southern California, puts forth that emotions are necessary ingredients to almost all decisions. What occurs is that emotions from previous experiences attribute value and impact how we consider the options in front of us. These emotions create preferences which lead to our decision. Damasio’s view is based on his studies of people whose connections between the “thinking” and “emotional” areas of the brain had been damaged. They were capable of rationally processing information about alternative choices; but were unable to make decisions because they lacked any sense of how they felt about the options.

Values

So if you are not using some method of assessing past experiences and values and hierachies in a clients decision making you actually leave so much of your process to chance. When it comes to money: we have values associated with our experiences and these values have been passed to us from our parents. If you are not questioning clients about these experiences your process is like waiting for a magic eye picture to appear.

Psychologist Valerie Wilson tells us that troubled relationships with money stem from childhood. Research shows that money habits are formed between the ages of 6-8.
Consequently these lessons (which we have learnt from our parents) shape the way we feel and act about money and money issues. Our attitudes to money bring with it a range of emotions and behaviour: they can be positive but they can also range from greed and arrogance, to jealousy and fear.

What all of this means is that that you need to embed in your process:
• a means of uncovering a clients values
• questioning on past experiences
• determining a clients hierarchy of choice assessment
• looking at a clients goals and the why of their goals so you can elevate a simple statement of a goal or objective to a highly functional progression and pathway that you indeed can influence
• a show casing of you as an individual and your brand

Dr Peter Noel Murray reminds us that the influential role of emotion in consumer behavior is well documented and studies show that positive emotions toward a brand have far greater influence on consumer loyalty than trust and other judgments which are based on a brand’s attributes. Only by building process in your business that is cognisant of: how people are drawn to brands, make decisions and order their values; can you truly expect to drive customer loyalty and advocacy.

The authenticity of you : know yourself and others

In ground breaking research by George (The Author of: Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value), Sims, McLean and Mayer (2007) what we thought we knew about leadership was challenged. The notion of authenticity was introduced as a key determinant of leader ship success.

Authentic leaders (they wrote in a HBR artcicle in 2007) are ones that demonstrate demonstrate passion, are consistent especially with their values and their interactions and are not afraid to wear their heart on their sleeve.

Importantly they "establish long-term, meaningful relationships and have the self-discipline to get results. They know who they are." (George et al, 2007).

Some of the key points of this 2007 article were:

leadership emerged from the individuals life stories often reframed so they understood who they were at their core. In doing so, they learned that being authentic made them more effective.
What the authors point out is that "critically many leaders reported that their motivation came from a difficult experience in their lives and rather than seeing themselves as victims, though, authentic leaders used these formative experiences to give meaning to their lives. They reframed these events to rise above their challenges and to discover their passion to lead" (George et al, 2007).

But this awareness and discovery can not take place without and individual having the courage and honesty to open up and examine their experiences. As they do so, it is suggested that leaders become more humane and willing to be vulnerable.

It is only by doing this type of self analysis to become self aware that leaders can develop and express the authenticity that is required to truly lead. Connection with people : really connecting with people is key as is understanding how in any given situation another person may be feeling. To that end George et al, write that these authentic leaders are constantly aware of the importance of staying grounded. They spend time with their families and close friends. They participate in physical activity and refesh and replenish their bodies and encourage others to do so. And further they create environments where a culture of acceptance, or flexibility of telling hard truths, of honesty and support are all accepted norms. All of this is essential to their effectiveness as leaders, enabling them to sustain their authenticity.

So what's your story? How self aware are you? How much have you examined your values? Over and above all of this how connected are you to the people that you lead.....do they see you as authentic?

So if you've read this far....thank you. I wanted to share with you part of my story. The story that, as a child, already influenced the construction of my personal identity and in time was to shape who I was and am now as an individual (Macionis & Plummer 2012, p. 215). What happened was a traumatic event in my childhood that involved sexual abuse.

Thirty-five years later, I am: a husband, a father, a driven and competitive individual,motivated by; making a difference in my career and social life, but also by; a fear of failure and a constant drive for being the best I can be. That drive has delivered a comfortable existence, a residence in the leafy east towards the Yarra Valley, and an office, in the financial hub of Melbourne. My career has provided the financial freedom to embark on further education, adding to an university degree and postgraduate qualifications in financial services. As I reflect now, it seems that I have defied, through design, research that points to lower incomes for male survivors of CSA and a career choice of a ‘female’ occupation (Robst & VanGilder, 2011, p. 350) and fought to join Weber’s concept of ‘party’ to effect power over my social outcomes, seeking class and status to reach my goals (Back et al, 2012, p. 51).

Similar to studies of relationships for male CSA survivors, I found myself, as a child, with very few dependable connections with adults (Kia-Keating et al 2010, p. 679). My relationships ran a course where they were with someone who offered emotional availability and care or where they themselves needed my help. I was drawn to women who were available or had experienced trauma.


Herbert Mead argued that people take on identities that we base on our participation in networks of social relationships and related roles (Merolla et al, 2012, p. 149). How we determine our sense of self is based therefore on social experience. The personalities I encountered allow me today to appreciate another persons point of view. Their problems (that I often sought out), from eating disorders, mental health issues, CSA and rape survivors, provided me with a sense of understanding of what real challenges and adversity are. Perspective was a gift that these people gave to me.

It is that appreciation of the experience of others that has allowed me to enjoy my work role as it is today. Fundamentally my career has been built around understanding peoples motivations and drivers and why they make the decisions that they do. My role involves me coaching and mentoring a sales team in financial services and I am called upon to deliver presentations about positive customer experiences and how to create them.

Financial services, however, in my experience, remains a male dominated industry and presents a boys club environment where the way to get ahead (sometimes) is by managing upwards. But rather than become part of this culture I have steadfastly resisted, seeking out the few female leaders in the industry and working with them. When I found myself in a male dominated organisation I refused to play the political games that were required for career enhancement instead striving for the recognition of personal endeavour. That rebellion against the social stability of those workplaces was in reality a protest against authority figures, particularly male ones. Weber’s assessment of authority and power is incredibly relevant.


In the workplace I do not automatically accept the traditional authority of a hierarchy of managers. Weber’s rational-legal authority and the political life of the society of a workplace (Macionis &Plummer 2010, p. 538) may be the backbone of organisations, but for me they represented the potential for the abuse of power. My association with experiencing CSA from a patriarchal figure saw me in later life avoid engaging in the politics of workplaces. Rather I was drawn to leaders who exhibited outstanding qualities that Weber described as charismatic authority,less attributed to social organisation and more associated with an individuals personality (Macionis & Plummer 2010, p. 538). Throughout my working life I have found those qualities more often in women and tried to lead others in that manner, setting an example of work ethic and relying less on the authority of a position and more on the genuineness of my actions.

For years I struggled with the emotional journey of healing. In Chris Gardner’s book, ‘Start Where You Are’, Chris, a victim himself of childhood abuse, passes the reader some advice:

“…to anyone in real crisis …find a place of calmness and stillness …where you can gain some perspective. Only with a reasoned outlook can you find the solutions and empowerment that are already there” (Gardner 2010, p. 58).

When I reflect on the experiences that make me who I am, I think of Foucault who argued that we are the product of discourses without which there is prior no essential self (Back et al, 2012, p. 95). The social experiences of my life, have developed the characteristics of what makes me, me (Macionis & Plummer 2012, p. 208). I am grateful for where I am in life, for the people I have met and the experiences I have had. It seems incredulous that I could ever look at my CSA experience that way. But finally I can say “Peace! Be Still” (Gardner 2010, p. 61)and understand in that moment the rich perspective my life experience has given me.

The story of your life makes you who you are. If you aspire to lead with authenticity, explore your story, decide what you can share, articulate your values and learn about others. Only then can you lead.

References

Back, Les; Bennett, Andy; Edles, Laura Desfor; Gibson, Margaret; Inglis, David; Jacobs, Ron; Woodward, Ian 2012, Cultural Sociology : An Introduction, e-book, accessed 15 November 2013, .


Gardner, Chris 2010, Start Where You Are ; Life Lessons in Getting from Where You Are to WhereYou Want to Be, Amistad, New York.

George, Bill, Sims, Peter, McLean, Andrew N and Mayer, D 2007, Discovering Your Authentic Leadership, HBR, Feb 2007 Edition,


Kia-Keating, Maryam, Sorsoli, Lynn and Grossman, Frances, K. 2010, ‘Relational Challenges and Recovery Processes in Male Survivors of Childhood Sexual Abuse’, Journal of Interpersonal Violence, vol. 25, no. 4, pp. 666-683.


Macionis, John, J. and Plummer, Ken 2012, Sociology: A Global Introduction, 5th ed., Pearson, Prentice Hall, New York.

Merolla, David, M., Serpe, Richard, T., Stryker, Sheldon and Schultz, P. Wesley 2012, ‘Structural Precursors to Identity Processes: The Role of Proximate Social Structures’, Social Psychology Quarterly, vol. 75, no. 2, pp. 149-172.


Robst, John and VanGilder, Jennifer 2011, ‘The role of childhood sexual victimisation in the occupational choice of adults’, Applied Economics, vol. 43, pp. 341-354.

How strong is your brand : managing customer psychology

In the current climate with such a focus on the industry, now more than ever before, making clients happy is key: [1]happiness makes us want to share and this is within not only our social circle in a physical sense but now with a site like “Adviser Ratings” - in a virtual forum.

Happiness is achieved by bonding and in the financial planners office when a client is most likely feeling emotions of fear and anxiety, people look to cope with those emotions by bonding with the adviser and the advice process. As researcher Lea Dunn advises us “in the absence of friends, consumers will create heightened emotional attachment with a brand that happens to be on hand.” That begs the question : how strong is your financial planning brand remembering that you and your staff indeed epitomise your brand and it is what clients are looking to bond with?

What is required then is process that embodies your authenticity and most importantly has an understanding of the psychology of the client before, during and after the advice process and how you can use technology to enhance that engagement. Welcome then to “Technoclientology”: the psychology of engaging clients in a modern world, where we combine what we have learnt from neuroscience, modernity and behavioural psychology and when combined with a social world, we can enable clients to make better decisions.

Psychology

Just how do we make decisions and what occurs in peoples minds to help them evaluate situations. What do we need to know about how peoples minds work?

“Cognitive control and value-based decision-making tasks appear to depend on different brain regions within the prefrontal cortex,” says Jan Glascher, lead author of the study and a visiting associate at the California Institute of Technology in Pasadena, referring to the seat of higher-level reasoning in the brain.[2]

In normal brain functioning people : a valuation network in the brain auto computes what's good and what's bad, before the person concerned has a chance to consciously understand the decision making process has occured. It is quick. It is intuitive and it is automatic.

This highlights the complexities in dealing with customers where you need them to make a considered rationale choice. The choice has less to do with the rationalities of your proposal and more to do with how they feel about you and your brand. In short they have a gut feel about what is good and what is bad for them : and if you have not connected with them then that good choice (rationally) seems the uncomfortable one.

Most people believe that the choices they make result from a rational analysis of available alternatives. In reality, however, emotions greatly influence and, in many cases, even determine our decisions

In a book, Descartes Error, Antonio Damasio, professor of neuroscience at the University of Southern California, puts forth that emotions are necessary ingredients to almost all decisions. What occurs is that emotions from previous experiences attribute value and impact how we consider the options in front of us. These emotions create preferences which lead to our decision. Damasio’s view is based on his studies of people whose connections between the “thinking” and “emotional” areas of the brain had been damaged. They were capable of rationally processing information about alternative choices; but were unable to make decisions because they lacked any sense of how they felt about the options. (ref Dr Peter Noel Murray).

So if you are not using some method of assessing past experiences and values and hierachies in a clients decision making you actually leave so much of your process to chance. When it comes to money : we have values associated with our experiences and these values have been passed to us from our parents. If you are not questioning clients about these experiences your process is like waiting for a magic eye picture to appear.

This all means that what you need to embed in your process is :

- a means of uncovering a clients values

- questioning on past experiences

- determining a clients hierarchy of choice assessment

- looking at their goals and the why of their goals so you elevate a simple statement of a goal or objective to a highly functional progression and pathway that you indeed can influence

- a show casing of you as an individual and your brand

Dr Peter Noel Murray reminds us that The influential role of emotion in consumer behavior is well documented:
•Advertising research reveals that emotional response to an ad has far greater influence on a consumer’s reported intent to buy a product than does the ad’s content – by a factor of 3-to-1 for television commercials and 2-to-1 for print ads.
•Research conducted by the Advertising Research Foundation concluded that the emotion of “likeability” is the measure most predictive of whether an advertisement will increase a brand’s sales.
•Studies show that positive emotions toward a brand have far greater influence on consumer loyalty than trust and other judgments which are based on a brand’s attributes.

We pay more for brand names. These brands have emotionally connected with us. The richer the emotional content of a brand’s mental representation, the more likely the consumer will be a loyal user.[4]



[1] The Science of Emotion in Marketing: How Our Brains Decide What to Share and Whom to Trust : Courtney Seiter

[2] Making Choices: How Your Brain Decides

Two distinct brain networks guide our reasoning and the behaviors we ultimately undertake based on those judgments

By Maia Szalavitz @maiaszSept. 04, 2012



[3] Making Choices: How Your Brain Decides

Two distinct brain networks guide our reasoning and the behaviors we ultimately undertake based on those judgments

By Maia Szalavitz @maiaszSept. 04, 2012



[4] How Emotions Influence What We Buy

The emotional core of consumer decision-making

Published on February 26, 2013 by Peter Noel Murray, Ph.D. in Inside the Consumer Mind

A new way to connect with customers : Technoclientology defined

(This is the preamble and background to a recently published article in my IFA blog. I've set the scene here and then included the link to the IFA article for the "implementation steps")



There's something about plane travel and hotel rooms that gets my mind whirring in a good way. It's not the jet lag that sets it off, or the preservatives in the airplane food, or the lack of sleep from missing my contoured latex pillow. Quite the contrary, for me I find everything about the experience a wonderful array of petri dishes where at worst I get to observe human beings engage in what sadly is becoming a lost art: human interaction, and at certain high points as those petri dishes bubble over with colonies of live clashes of culture, I find the collision of sales, marketing, social interaction, technology and human behaviour truly fascinating.

The simple act of boarding a plane provides an opportunity to assess people and the choices they've made on how to board (using an app, a text message, a frequent flyer card, a good ole fashioned boarding pass - from a kiosk or printed from home or work). How do those choices correlate to their other behaviours and decisions? From luggage (trying to sneak a third bag past the disapproving attendant, or nonchalantly with the utmost confidence), to other items they carry : kindle, iPad, hardcover book, style of headphones, facial expressions, volume and tone of voice : all of this creates a story from which assumptions and rather accurate conclusions can be made about how an individual and consequently how we collectively are dealing with the modernity of society and translating it into our daily interpersonal interactions and decisions.

Now perhaps clearly I have too much time on my hands and am somewhat voyeuristic ("what's that guy in 3C staring at?") but, for me this type of people watching in situations like this is incredibly important. They are a guide to the psychology of how people engage in a world that is changing at a dramatic pace. They give us insights into how we act and utilise technology for ourselves and with others and how we like to be engaged in a service environment.

Apple, do this brilliantly and are a great example to choose as what they are selling is more than the latest and coolest gadget. What Apple sells by means of its Apple Genius employees is empathy and leadership which allows customers to make the right decisions for them. Dr Sebastian Bailey wrote in Forbes magazine how detailed and deliberate Apple have become at grasping and using the psychology of selling. Apple, he points out, use the “feel, felt, found” approach to not only demonstrate empathy but to also enact evidence of social proof to lead a customer to solutions that others like them have made[1]. This embodies what we now refer to as Emotional Intelligence, defined as the ability to monitor your own and others feelings and emotions. Sebastian continues that what Apple do having set the stage thus, is the “Geniuses are not passive” they use “mantras like ‘we guide every interaction’, ‘we recommend solutions’ and ‘we help them discover’. Through the handy mnemonic ‘APPLE’ (Approach, Probe, Present, Listen, End), employees lead customers to a decision that they believe is all their own.”[2] Now this is where the neuroscience of Technoclientology kicks in because when it comes to choice, three is the magic number. As Sebastian reminds us, Researchers at the University of Minnesota used brain scans to show that it’s easier to make a choice between three products than it is to choose between two.

Going deeper here choice architecture is the process of encouraging people to make good choices through grouping and ordering the decisions in a way that maximizes successful choices and minimizes the number of people who become so overwhelmed by complexity that they abandon the attempt to choose. Generally, success is improved by presenting the smaller or simpler choices first, and by choosing and promoting sensible default options.[3]


Can we assess these choices using technology and in particular via social networks? Long have we heard that the future involves us arriving home, activating our giant touch screen wall, being notified that one friend has recorded Entourage for you and 3 others are watching it right now and that your groceries you ordered via an app are 5 minutes away from being delivered and a map indicates where the driver is right at that very minute, etc, etc, etc. The future may be coming fast but interaction with only a touch screen wall is maybe a pipe dream. In a study by the Australian Psychological Society, respondents were asked about their preference for online communication when compared to face-to-face interactions. The majority of respondents reported that they preferred to communicate with people in person rather than using online social networking sites (54%, with 25% neutral on this matter) suggesting that people are not necessarily moving away from face-to-face interactions but perhaps use online social networking to enhance their in person communications.[4] However disturbingly but perhaps not surprisingly if you’ve caught an elevator lately (a place where temporary hypnosis always takes effect) and seen every person staring into their phone, concerns about reduced face-to-face interactions and the loss of social skills have emerged.


Being “social” and using the technology platforms of social media means effective engagement to enhance interaction not to detract from it. Gossieaux and Moran, identify that in a web 2.0 world we are as human 1.0 beings engaging like we always have in that we are engaging in tribes, it’s just that now we can engage with tribes that span the globe and belong to multiple tribes at the same time, but what hasn’t changed is that these tribes have formed as they always have : there is a common connection and there is a transference of beliefs, knowledge and value that affects the way in which we make decisions and ultimately in how we live.[5]

In creating the term Technoclientology, my intent was to guide those in the business of professional services and all service industries for that matter to an umbrella discipline for engaging customers. Technoclientology then is the psychology of engaging clients in a modern world and encompasses the skills, techniques and concepts of sales, modernity, social (read Human) 1.0 and the insights from the field of neuroscience, that when combined allow us to observe, collate data, analyse and draw conclusions about how people will react and make decisions in a given situation faced with competing choices. A Technoclientologist uses these insights to enable people to become empowered and make decisions that are in their best interests. What is achieved here is the working towards a greater good.

So where to from here? Read the rest of this article and the steps you need to really connect with clients at:

http://www.ifa.com.au/blogs/13875-why-you-need-to-be-a-technoclientologist?utm_source=IFA&utm_campaign=IFA_Bulletin06_11_2014&utm_medium=email



[1] Bailey, Sebastian, 2012, The Psychological Tricks Behind Apple’s Service Secrets, Forbes, 2012

[2] Bailey, Sebastian, 2012, The Psychological Tricks Behind Apple’s Service Secrets, Forbes, 2012

[3] Iyengar, Sheena, 2010, The Art of Choosing: The Decisions We Make Everyday - What They Say About Us and How We Can Improve Them. Hachette UK

[4] The Australian Psychological Society, 2010, The Social and Psychological Impact of Online Social Networking

[5] Gossieaux and Moran, 2010, The Hyper-Social Organisation

Connecting with a Clients Values

We love this one inspired by an award winning financial adviser in Melbourne, Australia.

This is about connecting the strategy solutions to what is really important to a client.

If you can do this and demonstrate it in the SOA not only do you maximise the possibility of the prospect becoming a client, but you have also built a framework for choices the client makes that you can always revisit especially at review time to ensure that financial decisions are always in line with the identified values of the client.

Why is this important?

This is because money habits form very early on in our lives. It’s actually between the ages of 6-8 : s we have learnt most of our lessons from our parents and this shapes how we feel and act when it comes to financial affairs.
If you don’t question a client about these feelings you really can not truly know how a client will react to certain strategies, economic events, future financial decisions.

Some simple techniques are:

- Asking a client the three key words that come to mind when you mention a financial topic : superannuation, shares, investing
- Using lifestyle questionnaires that have a list of areas for the client to consider : they can be superannuation, investing but also : main residence, holidays, kids schooling, career, etc and asking them to rank how they feel about it now 1-5 and what they would like in the future
- The use of values cards

Irrespective of the technique : you need then to include a section in the SOA about what you’ve uncovered and connect your advice to these idenitified feelings and values.

Now values cards are used by recruitment agencies, training agencies eg: the “Training WA Career Centre) and it’s all about making better decisions on the premise that life and work decisions are always most satisfying when they fit with the values most important to you.

Mostly we act in accordance with our values to maintain a sense of well-being. But often our values are compromised by circumstances or events and we do things that don’t feel right. When we do things that are at odds with our values, we feel uncomfortable. Living in a situation where it is a constant struggle to act according to our values can cause stress, anxiety and depression.

Being able to align our lives with our values helps us make important decisions and feel grounded and focused. It inevitably leads to more happiness, achievement and contentment. At a team or organisational level, shared values keep the members focused on achieving their outcomes

The Values Cards can assist individuals, couples, teams and organisations to explore what is truly important in life, their relationships or work.

So what happens with this adviser is that you as a client (or each member of a couple) is given a deck of 250 values cards. The kind of words on them are things like : compassion, connection, creativity, achievement, adventure, challenge, health, family.

The client has to select 5.

This then leads to a discussion that is wide ranging and starts to encompass how the financial decisions the client needs to make fit with these values.

So imagine one of the cards is “family” (invariably that one does get selected).

Insurance has to become a key plank of a discussion or at least estate planning and hence then trust structures, business succession, continuity etc etc.

So it becomes the client that actually instigates the direction that the strategy conversation takes rather than the adviser initiating the discussion without being able to tie it into something the client has highlighted is important.

What needs to happen though is this conversation is reinforced and highlighted in the SOA and that each strategy recommendation is connected to a value or values.

Social, Big Data, Technology: run and hide or embrace?

Smart technology (wearable : clothes, watches, eye glasses) that records data on your life and has the ability to tell you what to do.

Voice personality profiling so that call centres can assign the right consultant to you but also provides them with information relating to your basic personality traits.

Companies using that data, big data, to generate value such as a retailer using big data to the full to increase its operating margin by more than 60 percent. Or ever-narrower segmentation of customers and therefore much more precisely tailored products or services.

The emergence of two social classes: the technologically connected and fabulously wealthy 15% and the rest of us relegated to a vast underclass.

"Vast troves of data on all of us and then using that data to provide us with a constant stream of advice on how to live our lives and make better decisions."

It is a policy makers dream. A corporations nirvana.

Will it really make our lives better?

Will this become our Gattaca? : The film of a future society driven by eugenics where potential children are conceived through genetic manipulation to ensure they possess the best hereditary traits of their parents. Characters in Gattaca continually battle both with society and with themselves to find their place in the world and who they are destined to be according to their genes.

Will it become our Divergent?: a society that defines its citizens by their social and personality-related affiliation with five different factions.

Will we become the humans of Wall-e? : obese, infantile consumers who spend their days immobile in hovering lounge chairs, staring at ads on computers screens (or Google glass)

Viktor Mayer-Schönberger, Professor, Oxford Internet Institute, speaks of the power of big data as a tool that has the "potential to shape every part of our society from health care and education to urban planning and protecting the environment." He also notes that But "like every powerful tool, it has a dark side too: It threatens privacy protection and human volition."

As Mayer-Schonberger points out the potential and current positives are plentiful. Data correlations help Amazon and Netflix recommend products to us.

He writes of the medical benefits such as the monitoring of "vital signs from premature born babies discovered that whenever the vitals seem to stabilize, there is a high probability that a baby will suffer from a dangerous infection just a few hours later. Stable vitals are red flags, and recognizing them enables doctors to treat an infant before the full onset of the infection. They know what, not why—but that itself saves lives."

And what of how we catergorise people based on what an algorithm determines. Data can be used to make assessments on people, on communities and characterise them in ways that predicts their life expectancy, their suitability for certain occupations, their voting intentions, their criminality and their purchasing habits. Data could highlight threats to society. But a threat determined by whom? Big data?

All manner of crimes have been inflicted on peoples from a call to arms of national pride, soveriegn borders, or the protection of an ideology. This could be our "Captain America's Winters Soldier", futuristic perhaps, but this is already happening. As Mayer-Schonberger highlights certain city neighborhoods are policed more aggressively because Big Data predicts a high-level of criminal activity.

What of choice, free-will, societal liberty and moreover to what extent will we become slaves to the data itself? Will we give up choice? And to what extent is a choice that is made from options presented to us by an alogorithm?

For me I'm still pondering the benefits which are immense and the social consequences that if not considered may lead us to a dark place from which only the data will determine our fate.

Perhaps I will become Amish. They're allowed Netflix and Wi-Fi yeah?


References:

Manyika et al, 2011, Big data: The next frontier for innovation, competition, and productivity, McKinsey Global Institute.

Reed, B, 2013, Prominent economist predicts smartphones will soon tell us how to run every aspect of our lives, BGR Media.

Viktor Mayer-Schönberger, 2013, Big Data’s Bright and Dark Sides, Skoll World Forum.