Understanding Financial Personality

Understanding the components of Financial Personality and how to apply it when advising clients.

Applies to:  Financial DNA subscribers, Financial Planners, Financial professionals

Common Questions:  

What is Financial Personality? What are its components, and how does it apply to financial planning?

Video Walkthrough: 

Note: This video was created with a prior version of the DNA system. It is possible that reports and screens will be different in the current system. If you have questions about reports or screens you see in the video, please contact support.


Details on Understanding Financial Personality: 

Every person inherently has a unique Financial DNA code representing their financial personality. This financial personality influences every life and financial decision a person makes and has 2 levels that are integrated.

Level 1

the natural-born DNA behavioral style that remains stable over time and will drive how they consistently respond to different events. This is the style measured by the DNA Natural Behavior Discovery.

Level 2

Their current learned behavioral style is consistently shaped by their environment, life experiences, values, and education.

These components (level 1 and level 2) act together to drive decision-making.

95% Natural Behavior (Level 1 – instinctive, automatic, hard-wired) + 5% Learned Behavior (level 2 conscious thinking based on experiences, education, values).

When an emotional stimulus (fear, greed, anxiety, excitement) triggered by money and relationships is introduced to natural and learned behavior, cognitive biases (driven harder by emotions) emerge and can lead to imperfect financial decisions.

To help clients avoid imperfect decisions, you as an advisor can measure and understand the biases likely to hijack the decisions of clients and provide sound guidance and awareness that these biases may be causing less than ideal decisions and outcomes for your clients.

Financial DNA Make-up: 95% Nature and 5% Nurture

Natural behavior is determined by around age 3 when the neural pathways are formed and remain very ingrained. It is based on genetics (“raw material”) and early life experiences.

Learned Behavior – people continuously develop, although natural behavior remains at the core. Stronger learned behavior is developed from age 3-18 that can be adapted with focus. Less ingrained learned behavior from age 19 can be modified with awareness, experiences, and education.


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