Supercharging Client Engagement With Digital Financial Personality Profiling

Greg Davies Oxford Risk Head of Behavioral Science London 30 March 2021

Supercharging Client Engagement With Digital Financial Personality Profiling

Where it is used in client engagement efforts at all, technology tends to focus on the administrative aspects of advisors learning about their clients, while treating those clients as robots. Greg Davies, Head of Behavioral Science at Oxford Risk, explains how technology can be blended with behavioral science.

Personalities don’t have an “off” switch. Different facets of our psychologies may turn their volume up or down depending on the environment, but they never tune out completely, even when we wish – and act as if – they would.

Many a cool head has wholeheartedly believed in the power of a perfect plan. A plan that need only be put in place to all but guarantee safe passage to journey’s end. This is why the course of every career, every fitness regime, and every true love has always run so smoothly. It’s why everyone who’s ever joined a gym has a glistening six-pack and can press a hippo over their head, and we’re all comfortably retired in our 40s.

The trouble with cool heads is that they make plans for other cool heads, when in fact they should be making plans for heads blinded by emotional reactions, and temporarily less capable of dealing with a stressful world.

Selecting good investments is important, but achieving good investment outcomes is more so. Our financial circumstances can clash with our financial personalities in such ways that – psychologically – the person who set the course is not the one who will have to stick with the journey. A future expected return looks a lot less tempting when viewed through the lens of immediate anxiety.

Comfort and confidence
Good investment outcomes require more than only good investments. They require an ongoing series of good investment decisions. Good decisions are made from a place of comfort and confidence. You can’t fire a cannon from a canoe.

The recipe for comfort and confidence is different for each investor. The only universal is that ignoring these differences can be costly. If we’re out of the markets, we could be reluctant to get in, and sit on cash at an unseen, but very real cost of foregone returns. If we’re in, we could be too keen to get out, or to tinker, scratching itches with trigger-happy trades that can be cured only with time, and which inevitably lead us to buy high, and sell low.

Just as we each react in different ways to different diets based on our genetics, our lifestyles, and our health goals, so too with investing. We find comfort in different things in different situations. That could be preferences for a certain type of investment, content or style of communication, or what guidance we get along the way. Beyond avoiding financial sugars, healthy investment prescriptions should be highly personal.

Buying stories
Personal sentiments may feel too nebulous for the numbers-driven world of investing. Yet investing is a human activity, and humans buy stories, not numbers. The right story gives us the comfort we need to stick with a plan, to engage with guidance, and to keep our eyes on our long-term objectives, amid the shouts of short-term stresses.

Oxford Risk has a long history of using academic insights and extensive empirical validation to assess financial personality and preferences on multiple scales. Advisors using our tools benefit from enhanced client engagement driven by scores on 15 distinct aspects of financial personality. These play vital roles in:

•    assessing comprehensive suitability;
•    highlighting cases of vulnerability;
•    guiding product selection;
•    tailoring client communication and decision-making processes; and
•    revealing attitudes to responsible investing and philanthropy.

Our latest research and its application in real-world settings shows how these insights can enable hyper-personalized solutions at scale, helping investors to be as comfortable as possible, as effectively as possible.

Our need for comfort, like our personality, cannot be turned off. It has to be catered for. Preventative prescriptions beat costly cures.

Using tech to apply behavioral finance to real life
For a high-level example of how this can be achieved, consider a system where each client of a given firm has completed a financial personality assessment, coupled with an assessment of each investor’s accompanying financial situation.

These assessments can be further supplemented with other behavioral information, short-term changes to financial circumstances, and demographics. For example: details of account activity, such as log-in records, trades, or contacting their advisor; what happened to a given portfolio last week; and working and/or family circumstances. This gives a comprehensive profile of each client.
Drilling deep
Because we already know a lot about which actions, messages, or products are most suitable for clients of different sorts, we can build up a similar profile for lists of products that are available to each client, categorizing them according to risk level, liquidity, “smoothness” over the investment journey, complexity, or any one of a dozen other attributes.

We can undertake a similar exercise for client communications: tagging all blogs, videos, articles, and newsletters according to their content, length, complexity, suitability for specific situations, etc.

We can also build an inventory of potential client engagements, or actions, or decisions, scoring each on attributes that can identify which specific aspects of investor personality that intervention will be most appropriate for.

With these simple lists in place our proprietary algorithm is able to rank each product, communication, or intervention according to which is most suitable for each specific client right now, and to continually do this in real time as circumstances change, or as the product or content lists are updated.

Even more powerfully, as the system observes which options are actually chosen or acted on by each client, Artificial Intelligence ensures that the machine learns from each interaction, gradually sharpening and improving the accuracy of its recommendations over time.

Investment is a journey; investment tech needs to come along for the whole ride
Our research has conclusively demonstrated that we can measure investors’ financial personality with simple but well-constructed questionnaires that are: quick and easy to use; stable and empirically validated; and which add substantial depth to client profiles.

These questions don’t need to be answered at a single point in time, but can be spread over the course of the client relationship. This turns an onerous upfront-focused profiling process into a valuable element of client engagement, enabling an ongoing dialogue which gives the investor valuable feedback on their financial personality, within a system that continually refines and personalizes recommendations and feedback.

Technology can be harnessed not only to make the administration of cursory “risk-profiling” more streamlined. It can enable a truly comprehensive approach to suitability, that recognizes the complexity of each client, and subsequently prescribes advice designed for humans, not robots: hyper-personalized recommendations, prompts, nudges and communication that help investors toward better decisions, based on a rich understanding of who they are.

Over the next few phases of development, using data collected in each phase, this suite of client engagement and scientific suitability tools can be mapped to ever more sophisticated decision-support tools to ensure that all investors get the best investment outcomes for their unique needs and personality, in a manner that’s as always-on as they are.

To learn more about Oxford Risk’s solutions, visit or email

This is a chapter from the 2021 edition of Technology Traps Wealth Managers Must Avoid. Click here to download your free copy.

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