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Client Behaviour and Decision Making > Topic 1 - Your Clients Story > Flashcards

Topic 1 - Your Clients Story Flashcards

1
Q

Money Scripts

A

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

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2
Q

4 types of Money Scripts

A

Money Avoidance
Money Worship
Money Status
Money Vigilence

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3
Q

Money Avoidance

A

Believe money is bad and that they do not deserve money

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4
Q

Money Worship

A

Key to happiness and that they can never have enough

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5
Q

Money Status

A

Link self worth to net worth

Outward displays of wealth and risk of overspending

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6
Q

Money Vigilance

A

Watchful of their financial health and believe it is important to save and work for money

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7
Q

Maslows Hierarchy of Needs

A

Physiological > Safety > Love and belonging > Esteem > Self Actualisation

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8
Q

Maslows Hierarchy of Needs - Physiological (Financial)

A

Requird for life (day to day living expenses)

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9
Q

Maslows Hierarchy of Needs - Safety (Financial)

A

Employment Securing and Insurance

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10
Q

Maslows Hierarchy of Needs - Love and Being (Financial)

A

Security of others - goals such as marriage, upsizing, education planning

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11
Q

Maslows Hierarchy of Needs - Esteem (Financial)

A

Passive Income

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12
Q

Maslows Hierarchy of Needs - Self-Actualisation (Financial)

A

Independance

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13
Q

Value added of Financial Advice

A 
Asset Allocation
Rebalancing
Cost effective implementation
Tax Efficiency
Behavioural Coaching
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14
Q

Describe 3 reasons identified by Dr Somers that clients may seek out expert advice.

A
  • 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
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15
Q

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?

A

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.

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16
Q

Identify five examples of value-add services Financial Advisers may provide to clients.

A
  • 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
17
Q

Briefly describe, in your own words, how the nature of the client-adviser relationship has potential to add value, compared with digital advice providers.

A

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

18
Q

Define each of the components in the Trust Equation

A
  • 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
19
Q

Reasons client will / will not implement advice

A 
Financial history
Advice Characteristics
Client Characteristics
Team Factor
Social and Environmental Factors
20
Q

The Trust Equation

A

Trust = (Creditability + Reliability + Intimacy) / Self Orientation

21
Q

Creditability

A

Words

What you know and how you communicate

22
Q

How to show creditability

A

Develop Expertise
Offer POV
Say I dont know
Express Passion

23
Q

Reliability

A

Actions

Consistency, Predicatability and Familiarity

24
Q

How to show Reliability

A

State Expectations
Promise and follow through
Be on time
Take Responsibility

25
Q

Intimacy

A

Safety when entrusting someone with something eg - personal information sharing

26
Q

How to show intimacy

A

Listen beyond words
Generous with Feedback
Use Persons name
Share Personal Information

27
Q

Self Orientation

A

It is who you focus on

If increases, trust goes down

28
Q

How to decrease self orientation

A 
Take time to find best solution
Plenty of questions
Listen
Serving > Sales
Self Awareness

Client Behaviour and Decision Making (10 decks)

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