Understanding Client Behaviour [Best Practices]

Owned by Gnamangkhala Rathipanya
Last updated: Sept 06, 2024 by Jude Petilla
2 min read

Understanding Client Behaviour [Best Practices]

Humans don’t always act rationally. In fact, they rarely do. Over the past 20 years, the disciplines of neuroscience, cognitive science and social science have repeatedly demonstrated that most of our decisions are heavily influenced by emotions and context. 

Recently, new fields have emerged in behavioural economics (affecting decisions through libertarian paternalism), behaviour design (creating contexts that affect behaviours), positive psychology (the study of human flourishing) and ethical design (design to benefit individuals, society, and the world). These are the areas we’ve drawn upon in creating the Lumiant process.

 

Behavioural Models

Drawing from multiple behavioural models of values, intent, motivations and behaviour, we adapted a new model specific to the financial advice context, to help advisers understand what’s truly important to their clients. The models we drew from included:

  • Core Motivators (Fogg) - from Stanford’s Persuasive Design Lab, these work in tension with abilities to determine human behaviour. 

  • Theory of Basic Values (Schwarz) - the most commonly referenced human values set, these were determined to be too broad and vague for meaningful conversations.

  • Acceptance and Commitment Therapy (Hayes) - utilising metaphors to elicit values-based goals, these were also too vague to generate a good interaction around financial priorities.

  • LifeValues (Vitt) - currently used by Smart About Money (SAM) to determine a financial personality, this set of drivers was found less useful for determining priorities.

  • Dimensions of Wellness (Swarbrick) - frequently used to good effect in wellbeing and mental health, these dimensions provided the right balance of needs for the self. This was the foundation for the 8 Dimension of Wellbeing

The 8 Dimensions of Wellness were used in conjunction with an expanding model of connection that covered:

  • Self

  • Loved ones

  • Community

  • Global

This formed an 8 x 4 matrix of outcome statements that were open enough to interpretation, yet tangible enough to generate a fruitful conversation e.g. “Help loved ones pursue purpose,” “Volunteer my time” or “Support my church or spiritual group”.

These outcome statements formed the core values on which Lumiant is focused. After testing, these were further distilled into the deck of 16 cards used in the Your Values process.

 

Understanding Clients

When first engaging clients, advisers naturally apply a triage process to quickly and accurately understand their motivations, relationship, and attitude to money. The better an adviser understands these aspects at the beginning of an engagement, the more they’ll be able to tailor their approach to the needs of a client. 

This understanding grows as the clients share more information through the Lumiant process, however there are several categories and scales advisers can use to quickly gain an understanding of who the clients really are. These categories include: 

Click on the above topics to learn more how we have designed and used the above in Lumiant