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Your Financial Footprint

This module aims to share insights into behavioral biases that drive clients' emotional responses at advice meetings, helping you better understand the buying brain and articulate your value. It supports you in delivering a profitable and sustainable service that clients truly value.

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Your Financial Footprint

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  1. BEHAVIOURAL ECONOMICS ‘REFRAMING’ MODULE Your Financial Footprint

  2. This is the second of four modules…

  3. Our aim Share insights into some typical Behavioural Biases that may drive clients emotional responses at ‘advice meetings’ Help you better understand the buying brain so you can better articulate your value Support you in delivering a profitable and sustainable service that clients truly value

  4. Objectives

  5. Your objectives and challenges? In the initial parts of client meetings (new & existing)

  6. Reframing

  7. Reframing Questions

  8. Two Candidates Alan: • intelligent • industrious • impulsive • critical • stubborn • envious Ben: • envious • stubborn • critical • impulsive • industrious • intelligent

  9. Most people viewed Alan more favorably than Ben. The initial traits in the list change the very meaning of the traits that appear later. The stubbornness of an intelligent person is seen as likely to be justified and may actually evoke respect, but intelligence in an envious and stubborn person makes him more dangerous. Sequence matters because the halo effect increases the weight of first impressions, sometimes to the point that subsequent information is mostly wasted

  10. I just want to top up my pension I am concerned about my standard of living when I do not want to work so hard I want my hard earned money to work as well as possible for me until I want to spend it I just need to do my ISA Product to Advice I don’t love my kids…but if you could reassure me that my existing provisions are OK should the worst happen that would be alright I’m OK, I don’t want any life cover thanks I want a decent standard of living when I do not want to work as hard I just need to add to my buy to let portfolio I want a better home for my family and am concerned about not paying more than I need to in order to get it I just want to get my mortgage sorted

  11. 90% Our competitors…

  12. Product to Advice transition Showing value and accelerating connection

  13. Professional rapport? Experience Expectations Objectives

  14. The world is connected…but only comes alive when salient

  15. Reflective statements connect the 2 parts What do we mean by a ‘reflective statement’? What is the power of using them? What are the dangers? What is the impact on empathy and client connection?

  16. Product to advice.Link these products to advice areas

  17. Product to advice conversion – new clients Reflective statements.. What I am hearing you say is…. So I am guessing …. E.g. ‘I just want to sort my pension’ = “Ah, so I am guessing it is about ensuring you maximise your standard of living when you do not want to work so hard?’

  18. How does that change for existing clients?

  19. Professional rapport – existing clients? Experience – how have they found it so far? Expectations – about what we do for our fees? Objectives – sense check the purpose

  20. Product to advice conversion – existing clients Reflective / purpose statements.. e.g. ‘I just want to see how my pension is doing’ = “yes, seeing how we are progressing is important. To gauge the success, lets remind ourselves objectively of the reasons that made us start this in the first place” … “yes, and to put that performance into context, so we can judge it, lets remind ourselves of the purpose of doing this’

  21. How will you remember to implement this?

  22. Frameworks Introduction Guidelines (using Trust components) Template

  23. We also have some example words for you It aims to provide some prompts and examples that you can personalise and implement in your own style It is not designed to be memorised, scripted and repeated verbatim It is designed to stimulate your thoughts and process, so a client can understand better the value that you add

  24. Real play experiment time If you wish to explore further we have included real play scenarios You can focus just on the area covered in this module…or You can link the three areas of ‘reframing – consistency – loss motivation’ together in the same scenario if you wish

  25. Your key learnings?

  26. References Kahneman, D. (2012). Thinking, fast and slow. Penguin Books. Retrieved from http://library.city.ac.uk/record=b1526364 Kahneman, D., Tversky, A., & Tversky ’, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Source: Econometrica, 47(2), 263–292. Retrieved from http://www.jstor.org/stable/1914185 Luise, V. (2005). Facts and Fears: Understanding Perceived Risk. In Policy and Practice in Health and Safety (Vol. Supplement, pp. 65–67). https://doi.org/10.1007/978-1-4899-0445-4 Slovic, P., & Lichtenstein, S. (1983). American Economic Association Preference Reversals: A Broader Perspective Preference Reversals: A Broader Perspective. Source: The American Economic Review, 73(4), 596–605. Retrieved from http://www.jstor.org/stable/1816560 Slovic, P., & Peters, E. (2006). Risk perception and affect. , 15(6), 322-325. Current Directions in Psychological Science, 15(6), 322–325. https://doi.org/10.1177/03063127067078012 Sunstein, C. R., Zeckhauser, R., Sunstein, C. R., Zeckhauser, R., & Ramsey, F. P. (2011). Overreaction to Fearsome Risks. Environ Resource Econ, 48, 435–449. https://doi.org/10.1007/s10640-010-9449-3

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