Behavioral IQ enables advisors to truly understand their clients’ personalities and risk tolerance to make more intelligent investment selections

WALNUT CREEK, Calif. – June 27, 2017 – Advisor Software, Inc., a leader in wealth management cloud solutions, today announced the immediate availability of Behavioral IQ, a first-of-its-kind comprehensive behavioral finance profiling solution that calculates deep behavioral characteristics influencing risk and financial decision-making. Behavioral IQ’s six diverse modules measure behavioral dimensions ignored by traditional subjective-preference risk surveys, resulting in a more accurate single risk score. Behavioral IQ turns insights into action and is the best way to determine a client’s true financial behavior.

Behavioral IQ

“The current psychometric risk assessment landscape for wealth management is broken. These tests have a high probability of producing flawed results, which can ultimately lead to a wrong investment strategy that could have disastrous outcomes,” said Dr. Andrew Rudd, Chairman and CEO of Advisor Software. “A more in-depth understanding of client risk and client decision-making is crucial in order for financial advisors to provide accurate advice and ensure that they are closely aligned with their clients’ needs and goals. Behavioral IQ’s measure of deep behavioral factors influencing risk and decision making enables financial advisors to truly understand clients’ personalities and risk tolerance to make smarter, more informed financial decisions.”

Clients can take the Behavioral IQ assessment on their own time. Once they finish, clients will have immediate access to their in-depth reports online and can revisit the results at any time. The reports are also sent to their financial advisors. A Myers-Briggs-type assessment for finance, the multidimensional insight provided in Behavioral IQ’s reports provide a more accurate look at a client’s decision-making and risk appetite, enabling advisors to make better-aligned, more intelligent investment selections.

“Behavioral IQ provides in-depth insight into an investor’s true financial behavior. Its combination of behavioral attributes gives advisors a far superior and reliable investment recommendation than a conventional, subjective-preference risk survey ever could,” said Evan Kulak, Co-Founder, Polaris Portfolios LLC. “Knowing more enables our platform to provide better counsel and offer more informed financial recommendations, ultimately resulting in higher client satisfaction and retention.”

Behavioral IQ provides an unparalleled understanding of a client’s true behavior. Its six modules of risk dimension are research-backed and provide a broader, more comprehensive set of risk tolerance measures than the traditional psychometric approach. The modules capture other important aspects of investment behavior including financial decision-making preferences; risk tolerance; financial knowledge; comfort levels in gain and loss scenarios; confidence; and financial loss aversion to provide advisors with a much deeper, more accurate understanding of their clients.

Behavioral IQ creates stronger client engagement with advisors, helping advisors to identify clients who would benefit from coaching, respond appropriately to market events, and communicate more effectively. In addition, Behavioral IQ’s ability to measure multiple dimensions of the investment personality enable advisors to sort and filter their investors according to these characteristics in the administrator console. It also enables them to understand regulatory vulnerabilities. Behavioral IQ provides insight into how advisors can best coach their customers, which may ultimately preserve wealth because advisors are helping the clients avoid financial mistakes.

“Client attitudes towards risk are swayed by whether choices are framed in terms of gains or losses and investing approaches vary greatly from quantitative to emotional,” said Terrance Odean, professor of finance at the University of California, Berkeley. “Behavioral finance recognizes that when making investment decisions people are more complex and less consistent than often assumed in finance models. To successfully advise a diverse set of clients in changing times, financial advisors must understand their clients’ preferences and decision styles along many dimensions.”

Developed in partnership with financial capability strategist Suitable Strategies, Behavioral IQ was recently named the Financial Sector Innovation of the Year at the FStech Awards. It is the product of three years of intensive research and development with world-class academics and experts in the field of human decision-making to identify behavioral concepts that have the greatest potential to determine a client’s true financial personality. Rooted in behavioral science, Behavioral IQ is benchmarked against comprehensive studies of the financial capability and investing decisions of U.S. investors.

Behavioral IQ is available immediately. For more information, visit http://advisorsoftware.com/solutions/behavioral-iq. To take the Behavioral IQ survey, visit http://bit.ly/2scrqcs.

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About Advisor Software, Inc.

Advisor Software, Inc. is a leading provider of wealth management cloud platforms for financial advisors and institutions. The company has pioneered the first Wealth Management Cloud platform that offers streamlined access to a comprehensive range of financial services and resources. Advisor Software’s products address advisors’ functional needs, including Automated Digital Advice, Planning, Proposal Generation, Portfolio Construction, Rebalancing, and Investment Analytics. The company’s solutions serve a wide range of financial institutions and professionals, enabling asset management firms, broker-dealers, banks, insurance companies, online brokerages, custodians, and providers of investment services and products to deliver more insightful, actionable investment advice and build stronger, more profitable client relationships.

For more information, please visit our website (www.advisorsoftware.com) and follow us on LinkedIn (https://www.linkedin.com/company/advisorsoftware) and Twitter @AdvisorSoftware (https://twitter.com/advisorsoftware).

Media Contacts

Wynne Ahern

CommStrat for Advisor Software

510-206-2161

[email protected]

Jessica Cheney

CommStrat for Advisor Software

419-350-4614

[email protected]

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