Wealthtech Insider (12/30/20)

Orion Thought Leader Q&A Series

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Part 2: Interview with Daniel Crosby on the importance of planning, behavioral insights and tech

By Kelly Waltrich, CMO |Orion


Last week, Eric Clarke sat down with Dr. Daniel Crosby to discuss the importance of client behavior in prospecting.

Today, Orion’s Chief Marketing Officer Kelly Waltrich continues the interview with Dr. Crosby about the intersection of planning, behavioral insights, and tech.


Kelly Waltrich: Hello, Dr. Crosby. I really appreciated your conversation with Eric last week on digital prospecting.

Dr. Crosby: You’re very welcome. I think a lot of us are realizing that we need to rewrite the rules for winning new clients in a remote-work environment. The good news is there are a lot of ways to use tech and behavioral insights to really connect with prospects in the same way we could with face-to-face interaction.

Kelly Waltrich: So, on the subject of behavior, let’s start by talking about financial planning and behavioral finance. Why should an advisor care about bringing these concepts together?

Dr. Crosby: There are only two things that will determine anyone’s financial outcomes: luck and behavior. We can only control our behavior. So, you have 100% control of 50% of your outcome.

Let me give you an example of why that’s important. Too often, people get caught up in things like “What is the Fed chair doing?” or “What will the president do next?” An investor asking these questions might be focused too much on things that are out of their hands. They get frustrated and feel helpless.

So, connecting financial planning with behavioral finance is about steering clients back to things they can control.

Kelly Waltrich: Let’s say you’re an advisor who has focused mainly on asset management, but you want to build up the planning side of your business and get a better handle on how behavioral insights can help you grow. Where should you start?

Dr. Crosby: Start with yourself. Everyone has biases and weaknesses. There are a lot of podcasts and books by behavioral finance experts – Dr. Richard Thaler comes to mind – that show the power of understanding human behavior. I would also recommend books like “Nudge,” “The Laws of Wealth,” and “Thinking Fast and Slow.”

Kelly Waltrich: What if an advisor wants to help a client change behaviors that are hurting their long-term financial goals?

Dr. Crosby: There are three things you need to change behavior. Ask anyone who has quit smoking or lost weight, and they will agree with these three things.

1.   Education – This helps the client understand how markets work and why they work. Education gives clients context into how their tendencies coincide with markets.

2.   Environment – This is critical for discovering a portfolio that is right for that specific client. Understanding and preparing their environment can help allocate an asset mix that will give them an experiment they can tolerate.

3.   Encouragement – This speaks to “just in time” support. It is the process of fine-tuning the plan and then fine-tuning the portfolio. Yes, there will be moments of panic, but advisors can provide significant value with constant support. 

Kelly Waltrich: It’s interesting that you mention “just in time” support. It’s the idea behind tech like Market*r, which can proactively nudge investors and advisors to take the next steps toward their goals. Where do you see “just in time” encouragement in advisor tech?

Dr. Crosby: There is a lot of power in gamified tech to “teach” investors better behaviors in a way that classroom education often can’t. A client may know the ins and outs of personal finance, budgeting, and balancing checkbooks. But there is a big chasm between the classroom and everyday life.

What gamification does is give you a nudge when you’re “hot” and already thinking about doing the right thing. It can push you to take the next step. Gamified financial planning tech is powerful because it taps into primal urges of motivation and reward.

At Orion, we’re very interested in gamifying risk. We’re researching technology that rewards good behavior in real time and gives clients a real education in the heat of the moment.

Kelly Waltrich: Dr. Crosby, thank you very much for your time. If our readers want to hear more from you, where can they look?

Dr. Crosby: You’re very welcome. I was a recent guest on Episode 14 of The Fuse Show, Orion’s podcast. The entire show is really a trove of business insights for advisors, and readers might be interested to hear from other featured guests as well. You can also find me on my own regular podcast, Standard Deviations.


Kelly Waltrich is Chief Marketing Officer of Orion Advisor Solutions. Connect with her on LinkedIn or follow her on twitter at @kdubs_waltrich.