Advisor Resources: Practice Management

Investor archetypes: Tailoring your communication style to your clients’ personalities

Are you connecting with your clients? Can they all say, “My advisor gets me…we really click”?

Communicating with your clients about their financial plan involves more than just numbers and charts. You need to connect with them on an emotional level. This requires having a deeper understanding of what motivates your client and drives them to make financial decisions.

To have better conversations with your clients — and build stronger relationships — you need to talk with them in their own language. This can be accomplished once you determine your clients’ personality temperament, which is the cognitive and emotional way they see the world. Depending on their temperament, some clients may prefer plain language while others prefer anecdotes.

How do you determine which kind of language to use with your clients?

The starting point for our framework is the four temperaments developed by Dr. David Keirsey: Guardians, Artisans, Idealists and Rationals.1 When applied to financial decisions, Keirsey’s personality types become investor archetypes.2

Within this paradigm, the members of each group are defined by their basic behaviors toward money and saving, and most importantly, by the benefits they want from their investments.3

This guide provides a snapshot of each investor archetype along with tips on how to identify and tailor your conversations and planning approach to each temperament. Knowing your clients’ temperament allows you to have better conversations with them, which can lead to better outcomes.

investor archetypes circle

Guardians

Who are they?

Guardians will often describe themselves as “practical,” “pragmatic” or perhaps even “prudent.” You’ll likely perceive them as frugal. They are more interested in preventing disruptions to their family than they are in discussing rates of return.

You’ll tend to find them taking care of someone or something, making sure they’re safe. Likely occupations include administrative and regulatory authorities, safeguarding of property and the caretaking of physical health.

How to put this into practice

Be orderly. Be linear. Be literal.

  • Build them a plan. For a Guardian, it’s all about the plan. They are looking for a step-by-step path to get from here to there — and being “there” means feeling secure.
  • Keep them on track. Dutifully scheduled periodic reviews are needed to update them on their progress, or lack thereof.
  • Educate and assure. Newsletters and client events with industry experts can help if the focus is on educating and working toward their goal of security.

Conversation starter

New and prospective Guardian clients may want to hear about your credentials and your long-standing client relationships. Impress them!

Artisans

Who are they?

Artisans are enterprising craftsmen. They are opportunistic about life and investing. When asked for their views on any specific investment, they’ll likely say they trust their instincts. To them, accepting risk is part of the reward. Literally or figuratively, you’ll probably find them building something. With their hands or their minds, they’ll be transforming something into something greater. Artisans are often found in hands-on professions, like carpenters and surgeons, as well as entrepreneurs and salespeople.

How to put this into practice

Cut to the chase. Focus on the now.

  • Meet their needs. As an Artisan, they’ll want to know how much they can enjoy the present. However, you need to make sure today’s “fun” is not at the expense of saving for tomorrow.
  • Watch their risks. Introducing the thrill of speculation to an Artisan can help them reach their long-term goals, but keep an eye on their overall risk levels.
  • Today comes after tomorrow. Focusing their attention on their near-term wants can be the best pathway to their long-term goals. Automatic investment plans are a powerful tool.

Conversation starter

Your Artisan clients and prospects will want to hear that “doing” is an integral part of the plan. Show them that you — and your financial planning — can be flexible by presenting different scenarios.

Better conversations. Better outcomes.

Helping you engage in better conversations that drive better outcomes is at the very heart of who we are at BMO Global Asset Management.
Take a deeper dive into investor archetypes as part of our Better conversations. Better outcomes. podcast series.

Red circle arrow icon  Episode 1 – Investor archetypes

Idealists

Who are they?

The self-identities of Idealists are inseparably tied to their ability to give. Who they are is primarily defined by the resources they share with others. They may openly shy away from being seen as wealthy or successful by traditional measures.

You may see them as countercultural because they may have little to no interest in their own financial planning or monetary success. They are often drawn to careers in counseling, journalism, ministry and other occupations that focus on inspiring others.

How to put this into practice

To act as their guide, you’ll need to share their goals.

  • Be visual. The Idealist needs a guide for their journey, and you may need to visually show them the path — with a client roadmap and/or goals-based reporting. Be sure to include images and pictures to help convey the plan.
  • Keep it simple. Your conversations should be based in plain language and include analogies and metaphors, if appropriate. Avoid mass-produced communications. Personalized communications work best as a means to show sincerity.
  • Keep them safe. Watch the Idealist’s generous nature. They may need your help in managing requests for money, particularly from family members and the charities they hold dear.

Conversation starter

From the outset, an Idealist will need to know you can build a plan that aligns their personal beliefs with their financial plan. Let them know you can help them give more.

Rationals

Who are they?

Rationals are highly skeptical, independent thinkers. You may spot them delighting in challenging conventional wisdom or the status quo. When it comes to investing, they’re calm and confident — but only after building their understanding of the risks and rewards.

At the head of the pack is where you’ll likely find Rationals, though it’s just as likely they’ll find you. In leadership positions, both in and outside the military, as well as logistics and engineering, they often excel in process-driven professions.

How to put this into practice

Respect their intellect, but challenge their skepticism.

  • Share your knowledge. A Rational will be looking for a planner who shares his or her rationality, but will ultimately want a sensei who is willing to teach, not merely direct.
  • Openly discuss risk. Investing will look like just another process to be “mastered,” so you’ll need to explicitly discuss risks to keep them from fixating on simply maximizing returns.
  • Be a thoughtful leader. Attract and keep your Rational clients engaged with market commentaries and thought leadership, even if it’s complex — they’ll relish the challenge.

Conversation starter

Rationals are much more interested in “new and improved” than “tried and true,” and discussing exotic investment strategies will be seen as a learning opportunity. Play the teacher and challenge the student.

Which investor archetype are you?

For more information on investor archetypes and to take the investor archetypes quiz to determine your investor archetype, download the full article below.

 

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1 “Please Understand Me: Character and Temperament Types,” David Keirsey and Marilyn Bates. Prometheus Nemesis Book Company (1978).
2 “What Investors Really Want,” Meir Statman. McGraw-Hill Education (2010). Many of the concepts related to how different personalities think about financial matters came from the work of Professor Statman and conversations the authors of Someday Rich had with Professor Statman.
3 “Investor Archetypes (bmogamviewpoints.com/investor-archetypes),” podcast with Matt Smith, Managing Director, BMO Global Asset Management, discusses the origin and development of the four investor archetypes, highlights their usefulness to Financial Advisors and their importance in the financial planning process.

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