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Speak To the Person(a), Not the Wallet

Insights based on The Flexible Advisor podcast

Can we all agree? 

Financial decisions are rarely based purely on "reason."  Deciding when and how much to invest, and who to trust, involves emotion, past experiences, biases, and any number of unspoken assumptions.  This is the essence of Behavioral Finance.

FlexShares’ recent study, The New Rules of Growing Wallet, examines the influence of Behavioral Finance dynamics on high-net-worth investors’ advisor allocation decisions. One of the architects of this study, Barnaby Riedel of RDCL, an independent market research and communications consultancy dedicated exclusively to the financial services industry, talked with The Flexible Advisor about the research and what advisors can gain from the results.

"Just Earn Their Trust"

It sounds simple enough: If you can earn a client's trust, you can increase wallet share. This may explain why research on the topic has tended to focus on advisors’ behavior. That makes sense, but for one faulty assumption: that one tactic can succeed with all clients.

The FlexShares study looked at how investors, not advisors, come to the wallet share discussion. “We chose to take what anthropologists call the ‘inside view’ or ‘the native point of view’,” said Riedel. “Do clients come with an idea already in mind? What are they thinking in terms of ‘what portion of my pie do I want to give to any one advisor versus another?’”

The study was structured in two phases:  In Phase 1 participants were invited to tell their money stories, what informs their personal views and approach to investing. “In those discussions, we quickly recognized five ‘personas’ of wallet share,” said Riedel. “Trust is important to all of them, but how it's built is dependent upon understanding their unique emotions.” In Phase 2, participants were quick to identify themselves among the five personas, confirming that different clients have distinct hurdles when it comes to establishing trust with an advisor. As Riedel said, “When advisors can build trust based on what different personas are looking for, they build deeper relationships and drive greater satisfaction. It's a win-win when trust can be built with an understanding of these nuances. It should benefit both advisors and investors alike.”


  • There isn’t one tactic for growing wallet share that works with all clients. 

  • Understanding your clients’ money stories and the emotions driving behavior is critical.

  • Sometimes the best way to get more client assets is not to ask to manage more.

What Can Advisors Do Better?

"A lot of advisors want to go right into a conversation about the markets and where the best investment is,” said Riedel. “That can often be at the detriment of understanding what the client cares about and what actually drives their decision to trust you with more of their assets.” With that in mind, Riedel reviewed the five ‘personas’ revealed in the research, and suggested a few practical guidelines for advisors to refine their approach.

Investor Persona

Advisor Process

The Protector wants to risk as little as possible, is skeptical of advisors, and often invests the minimum.They are worried.  Reinforce the rules of investing.  Give them a sense of stability - how things will work, how things do work, the rules of the game.
The Competitor likes to play advisors against one another, and often against their own investing prowess.They're often anchored on short-term performance.  Bring attention to the long game.  Make sure they see you as being on their team.
The Collector spreads assets among more than one advisor and often doesn't tell those advisors about each other.A collection of advisors becomes a burden to manage, so appeal to their need for simplification.  Move the conversation to a focus on planning.
The Verifier is looking for excellent service.  They're testing you as an advisor.These are people who feel pretty savvy; demonstrate value by challenging how they've thought about things.  Identify the missing pieces in their plan.
The Simplifier wants everything as easy as possible; less interested in complicated details.There may be money on the sidelines; don't assume you already have it all.  Make them aware of your full menu of services.  Schedule check-ins to see if anything's changed.
"When you can identify what matters to people and how they think about their wallet, you will be that much closer to growing wallet share in an organic and natural way." -- Barnaby Riedel

The main takeaway, according to Riedel: “At the core of this research, we learned that people really do want relationships with their advisors. They want to trust the person that's working on their behalf. They want to know that their advisor sees them as a person, not an investment portfolio. When you can identify what matters to people and how they think about their money, you will be that much closer to growing wallet share in an organic and natural way.”

You can access the full discussion on The Flexible Advisor, wherever you get your podcasts.

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