Using Human Behavior Models to Develop Your Advisor Business

I talk a lot in my blogs (and my business) about using the soft sciences and human behavior to develop a business that puts the clients’ needs first and that will develop into a fulfilling and lucrative career you can be proud of. In some of my past blogs, I’ve talked about how to mentor clients, developing a lifetime interest in learning, and the difference between EQ and IQ.  My philosophy of doing business is all based on human behavior, the bedrock of the soft sciences. As humans, we all act certain ways based on a combination of evolutionary tweaks, our own personal histories, and our personalities. As advisors, we can better guide our clients on a successful financial path when we know what these behaviors are, how they present in our clients, and how best to manage them.

One of the most useful models of human behavior that I have come across is Maslow’s Hierarchy of Needs. If you didn’t study psychology or human behavior in school, you may not be familiar with his theory, but this handy graphic should help illustrate the basics of the model.

image of triangle from Maslow's Heirarchy of NeedsTo boil it down, Maslow believed that all humans must have basic needs met before they can even begin to think about fulfilling higher wants and needs. For example, a refugee in a war-torn country will not be able to think about developing deep friendships until they have found a safe place to live and enough food and water to keep them alive. On the other hand, a successful businessman in the US probably doesn’t have to worry about the basic needs levels and may already have good friends, a happy marriage, and a thriving career that meet his psychological needs. Therefore, he can start focusing on being creatively fulfilled and how to achieve his full potential.

As fee-only advisors, one of our main goals is to help clients on their way to happiness and success. Though we often think this means preparing them financially for retirement and other monetary goals, it also means ensuring their hierarchy of needs are met so they can live a full and rewarding life. When you meet with new clients, you need to determine where they are in the big picture of their life. And by ‘big picture’ I don’t mean ‘how much money they have in their bank account’.

If a client comes to you and wants to talk about funding an early retirement, it’s important to really get to know that client’s story. Do they want to retire early because they’ve achieved all the levels of self-fulfillment and are ready to enjoy what they’ve built? Or are they trying to jump levels because they have no deep relationships or pride in their careers and they think retirement will be the shortcut to self-actualization? The answer to this question should be imperative in how you mentor this particular client.

If you’re interested in other models of human behavior, you may also want to study the Max Neef Model of Human Scale Development and the DISC model of human behavior. The more you know about human behavior and motivation, the better you can get to know your clients and help them see how their behaviors are impacting their financial decisions. If you’d like to chat more about developing a fee-only advisory business based on the soft sciences, please feel free to reach out. I’m here to help.


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