The Data-Driven Science Of Growing AUM by Dan Solin
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Advisors have a confusing relationship with data. If they embraced data-driven research about interpersonal relationships in the same way they do their investments, they would add clients and grow their assets.
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Few dispute the importance of data in evaluating investments. Recent articles in Advisor Perspectives include discussions of current pricing of office-market REITs, the growing popularity of environmental, social and governance investing and an analysis of whether the returns of Jeremy Siegel’s “superstar” funds is likely to persist.
Clearly, articles like these make a positive contribution to the expertise advisors need in order to best serve their clients.
But advisors are less likely to rely on data in non-investing areas of their practice. In part, this is due to a failure by those planning conferences and internal training venues. Typically, most (if not all) of the sessions are devoted to investing-related issues. When I am invited to speak at these events, I am often the only one discussing the data on “evidence-based persuasion.”
It’s not for lack of interest. My workshops are typically oversubscribed. My colleagues who consult with advisors tell me they have a similar experience. Advisors are hungry for information that will help them convert more prospects into clients. It’s often the necessary conversation that isn’t happening.
Here are a couple of ways using data in a non-investing context can benefit your practice:
Use of colors
If you are opening up a new office, redesigning an old one or giving your webpage a new face-lift, you should be aware of the data on the effect of your color choices. This is a subject I’ve written about previously, as have others.
Few would quarrel with the importance of establishing trust with prospects and clients. Research indicates that blue is the color most associated with trust, and white is the second most associated.
Blue was also the winner when participants were asked to associate a color with “security.” Black come in second.
Black and blue were the winners when participants were asked to associate a color with “high quality.”
Some of these findings were contradicted by other published studies, so they should not be viewed as absolute.
The evidence for a positive association with blue is enhanced by surveys showing it is the favorite color for both genders, although men prefer it by a greater percentage than women. The least favorite color for people of all ages and both genders is orange, followed by brown and yellow.
Colors can have a significant effect on office productivity. There’s evidence that difficult mental and visual tasks are better performed in an environment with “softer and deeper colors,” like deep lavender and soft gray, as long as there is adequate lighting.
My point here is not to impose color choices, but rather to alert you to the existence of data on this subject that you and your vendors should consider before making decisions about your office environment or website.
Importance of emotions
A thought-provoking article by Mark Schaefer, a marketing consultant, recounted the best marketing advice he had received in the past five years. It came from Robert Cialdini, who authored the seminal book, The Psychology of Persuasion. This book should be required reading for every advisor.
Read the full article here.