Topic 1 - Your Clients Story Flashcards
Money Scripts
Are the unconcious beliefs we have about money. These drives all our financial behaviours and is different among people.
Forms from our earliest encounters with money
4 types of Money Scripts
Money Avoidance
Money Worship
Money Status
Money Vigilence
Money Avoidance
Believe money is bad and that they do not deserve money
Money Worship
Key to happiness and that they can never have enough
Money Status
Link self worth to net worth
Outward displays of wealth and risk of overspending
Money Vigilance
Watchful of their financial health and believe it is important to save and work for money
Maslows Hierarchy of Needs
Physiological > Safety > Love and belonging > Esteem > Self Actualisation
Maslows Hierarchy of Needs - Physiological (Financial)
Requird for life (day to day living expenses)
Maslows Hierarchy of Needs - Safety (Financial)
Employment Securing and Insurance
Maslows Hierarchy of Needs - Love and Being (Financial)
Security of others - goals such as marriage, upsizing, education planning
Maslows Hierarchy of Needs - Esteem (Financial)
Passive Income
Maslows Hierarchy of Needs - Self-Actualisation (Financial)
Independance
Value added of Financial Advice
Asset Allocation Rebalancing Cost effective implementation Tax Efficiency Behavioural Coaching
Describe 3 reasons identified by Dr Somers that clients may seek out expert advice.
- To reduce complexity
- To take action
- To help make better trade-offs
- To increase confidence
- To feel safer
- To offload unpleasantness
- To have someone to blame
- To make someone else happy
- To receive encouragement
- To save time
Why is understanding the clients’ real reasons for seeking financial advice, beyond seeking answers to financial problems, an important aspect of the value proposition of a Financial Adviser?
The reason clients seek advice are important because it highlights how the intention of an advice-seeker is often not actually about the advice-answer itself. Which in turn, helps to explain why clients don’t necessarily follow through on “the answer” when the recommendation is provided to them.
If the advisor doesn’t consider the true reason for why a prospective client is seeking out their advice, it’s hard to provide a service which meets the clients’ needs or expectations.
Identify five examples of value-add services Financial Advisers may provide to clients.
- Asset allocation, cost-effective implementation and rebalancing
- Tax-efficient accumulation and distribution
- Budgeting and debt management
- Estate, social security and risk management (insurance) planning
- Behavioural coaching
Briefly describe, in your own words, how the nature of the client-adviser relationship has potential to add value, compared with digital advice providers.
Responses to this question will vary, but may include the following themes:
• Provision of complex / holistic advice (e.g., taxation or estate planning)
• Face-to-face meetings / human interaction
• Behavioural coaching
• Potential time saving advantages compared with DIY
Define each of the components in the Trust Equation
- Credibility is derived from what you know, and how you communicate.
- Reliability is derived from consistency and predictability in your actions.
- Intimacy refers to the safety you feel when entrusting someone with something.
- Self-Orientation is about who you focus on – yourself or others
Reasons client will / will not implement advice
Financial history Advice Characteristics Client Characteristics Team Factor Social and Environmental Factors
The Trust Equation
Trust = (Creditability + Reliability + Intimacy) / Self Orientation
Creditability
Words
What you know and how you communicate
How to show creditability
Develop Expertise
Offer POV
Say I dont know
Express Passion
Reliability
Actions
Consistency, Predicatability and Familiarity
How to show Reliability
State Expectations
Promise and follow through
Be on time
Take Responsibility
Intimacy
Safety when entrusting someone with something eg - personal information sharing
How to show intimacy
Listen beyond words
Generous with Feedback
Use Persons name
Share Personal Information
Self Orientation
It is who you focus on
If increases, trust goes down
How to decrease self orientation
Take time to find best solution Plenty of questions Listen Serving > Sales Self Awareness
