In an exclusive interview with ifa, Inwood said research indicates investors are moving away from cash into equities and direct property, but that psychological profiling is necessary to take advantage of this shifting investment trend.
“People are hunting utility, this is what they want from their planner, and your utiles depend on your behavioural set,” he said.
“If you are what Freud would term a ‘controller’ then you are likely to be measuring your planners worth in return; if you’re what Freud would call a ‘worrier’ and fear is your motivating factor then what you want is comfort and security – someone to hold your hand tell you you’ve made the right decision; if you’re what Freud calls an externaliser, and are always comparing yourself to others, then you want to be assured you’re with the right company, the right brand.
“So the adviser needs to be aware of the behavioural set of their client before they can provide utility, it’s really important that they understand how to approach these different clients.”
While some advisers will be “polymaths” and able to cater to clients reflecting these various behavioural sets, most will have to be attuned to their own personality and decide which of these groups to tailor their value proposition to, Inwood said.
The regulatory environment, which Inwood says is currently “all about moving the industry from a sales to a service mindset”, is compatible with this psychoanalytical approach to client engagement, he said.
The comments follows research released by the Association of Financial Advisers and the Beddoes Institute this week which indicated demand for high levels of emotional intelligence is in demand from clients of “trusted advisers”.
Interesting – fancy needing to know and understand your client….
The trouble with our industry is that it has been sales-based for so long that it will take a long time for many to transition to service-based thinking. Until advisers understand the service concept and put aside their desire to sell investments they will struggle to understand their clients AND their clients will respond by staying focused on investment performance as the the main criteria in assessing adviser value.
As a financial planner who also holds a masters degree in Psychology, I understand the need for being aware of client’s psychology in their engagement and service provision. However the business world is littered with corpses of people who have latched onto psychological literature and ideas and tried to generalise these into a business setting. Its generally done poorly. I would approach psychological profiling as a method of client selection very carefully. Just ask your HR department how early psych testing really helped in choosing job candidates. See if you can tell whether they are being honest with you.