Behavioral Financial Advice and You Workbook · PDF fileBehavioral Financial Advice and You Workbook ii ... Step 2: Rate each competence relative to its strategic priority (importance

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Behavioral Financial Advice and You Workbook

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Behavioral Financial Advice and You Workbook ii

Table of ContentsModule 1: Introduction to Behavioral Financial Advice Quiz 1

Module 1: Certainty of Uncertainty Reflection Questions 2

Module 1: Six Behavioral Competencies 3

Module 2: Stress Assessment Reflection Questions 4

Module 2: Gratitude Channel Reflection Questions 5

Module 2: Identify Personal Biases Questions 6

Module 3: Values Questions 7

Module 3: EQ-i Reflection Self-Assessment 8

Module 3: EQ-i Report Follow-Up Questions 9

Module 4: Recognizing and Reflecting on Emotional Patterns 24

Module 4: Understanding Your Baseline Frame Questions 27

Module 4: Goal and Activity Reflection Questions 28

Appendix 29

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Behavioral Financial Advice and You Workbook 1

Introduction to Behavioral Financial Advice Quiz

True False1. The average equity mutual fund investor tends to outperform the S&P 500 over time.

2. During the 20-year period ending in 2015, the annual performance of the S&P was 10.13%.

3. During the 20-year period ending in 2015, the average performance of an equity fund investor was 5.6%.

4. During the 20-year period ending in 2015, the rate of inflation was 1.9%.

5. Emotions have little to nothing to do with financial decision making.

6. Psychology has little influence on the behavior of financial practitioners.

7. Investment-centric advisors (ICAs) tend to get more business than their relationship and client-centric (CCAs) counterparts.

8. Paying attention to one’s own physiological, emotional, and cognitive experience is criti-cally important to behavioral financial advice.

9. Effective leadership/influence of client behavior is primarily a function of advisors man-aging their own behavior effectively.

10. Behavioral financial advice will replace financial planning advice.

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Module 1: Certainty of Uncertainty Reflection Questions1. On a scale from 1 to 10, with 1 being not ready, and 10 being very ready, how prepared are you for the

certainty of uncertainty? Explain your answer.

2. How have you prepared for death or scenarios where you might be alive but unhealthy or unable to work?

3. How much will you really need to support your desired lifestyle?

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Module 1: Six Behavioral Competencies

Competency Type Definition Components

Integrity Moral Actions are consistent with what one says is important, that is, he or she “walks the talk.” Communicates intentions, ideas, and feelings openly and directly, and welcomes openness and honesty, even in difficult negotiations with external parties.

• Takes actions that are consistent with values and beliefs

• Acts on values when it is not easy to do so

• Takes action based on values when significant cost or risk is at stake

Customer service orientation

Moral Implies a desire to help or serve customers, to meet their needs. It means focusing one’s efforts on discovering and meeting the customer or client’s needs.

• Follows up• Maintains clear communication• Takes personal responsibility• Takes action for the customer• Addresses underlying customer needs• Uses a long-term perspective

Concern for order/quality

Technical Reflects an underlying drive to reduce uncertainty in the surrounding environment. It is expressed in such forms as monitoring and checking work or information, insisting on clarity of roles and functions, and so forth.

• Shows general concern for order and clarity

• Checks own work• Monitors own or others’ work for order• Monitors data or projects

Teamwork Emotional Implies the intention to work cooperatively with others, to be part of a team, to work together, as a member of a group (rather than as a leader) as opposed to working separately or competitively.

• Cooperates• Expresses positive expectations of

team• Solicits inputs• Encourages others• Builds team spirit• Resolves conflict

Self-confidence

Emotional A belief in one’s own capability to accomplish a task and select an effective approach to a task or problem. This includes confidence in one’s ability as expressed in increasingly challenging circumstances and confidence in one’s decisions or opinions. Higher levels are primarily demonstrated with one’s boss or others in “superior” positions, not with subordinates or peers. Can also refer to one’s emotional response to challenging circumstances.

• Presents self-confidently• Acts independently• States confidence in own ability• Chooses challenges or conflict• Chooses extremely challenging

situations

Achievement orientation

Emotional Wants, plans, acts to meet or surpass a standard of excellence; measures outcomes against goals; innovates to improve; takes calculated risks to do something new or better.

• Standard of excellence• Creates measures of progress or

results• Improves performance• Sets challenging goals• Looks at the return on investment or

cost-benefit analyses• Takes calculated entrepreneurial risks

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Module 2: Stress Assessment Reflection Questions1. What is one common source of stress in your life?

2. How does that stress impact your behavior or emotions?

3. In what way could your relationships with others help you better manage this stressor?

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Module 2: Gratitude Channel Reflection Questions

At the moment you are experiencing real anger, you might have some trouble turning on the gratitude channel. It’s something you have to get used to doing. This exercise makes you think about it in advance. Write out your answers to each of the following questions in order to remember them in the future when you are playing the gratitude channel.

1. Who do you love?

2. What are you are grateful for?

3. What are you thankful for?

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Module 2: Identify Personal Biases Questions

Identify one bias that you know you have. Write it in the space below and then answer the following questions.

Bias:

1. How did you get this bias?

2. Why do you find this bias important?

3. Why is this bias of yours fair, relevant, or even worthy of having?

4. How could this bias help or hurt you or others when you are making decisions?

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Module 3: Values Questions1. What values did you choose?

2. Were there any values you had trouble leaving out of your final five? Why or why not?

3. How do you currently live your values?

4. What decisions have you made that reflect your values?

5. What decisions have you made that do not reflect your values?

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Module 3: EQ-i Reflection Self-Assessment

Directions

Step 1: Read through all of the emotional intelligence competencies listed below.

Step 2: Rate each competence relative to its strategic priority (importance to your job) by circling the appropri-ate rating (L = Low, M = Medium, H = High).

Step 3: Place a checkmark next to the three most critical competencies for your job as you look forward to the next three to five years.

EQ-i Competencies Strategic Priority (L = Low, M = Medium, H = High) Most Critical Competencies

Self-Perception Components

• Self-Regard L M H

• Self-Actualization L M H

• Emotional Self-Awareness L M H

Self-Expression Components

• Emotional Expression L M H

• Assertiveness L M H

• Independence L M H

Interpersonal Components

• Interpersonal Relationships L M H

• Empathy L M H

• Social Responsibility L M H

Decision-Making Components

• Problem Solving L M H

• Reality Testing L M H

• Impulse Control L M H

Stress Tolerance Components

• Flexibility L M H

• Stress Tolerance L M H

• Optimism L M H

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Module 3: EQ-i Report Follow-Up Questions

Choose one or more competencies from the EQ-i that you feel you need to work on. Locate that competency (or competencies) on the following pages and answer the related questions to start reflecting on your emo-tional intelligence.

Self-Regard

1. What do you believe are your strengths? Provide an example where you used your strengths to your advantage.

2. Which of your abilities require development? Provide an example where you have had to work around/compensate for an area of weakness.

3. How can you use your strengths to achieve more of your goals (personal or job performance)? How can you overcome weaknesses on the way to achieving your goals?

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Self-Actualization

1. Can you describe 1 or 2 of your short-term goals? Long-term goals? How are your short-term goals connected to your long term-goals?

2. How do you make time to do things you truly enjoy? What are some of the benefits both you and your career receive from these activities?

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Emotional Self-Awareness

1. How do your emotions affect other people? Can you provide an example where your teamwork (or a relationship) was affected by the way you were feeling?

2. Describe a time when you were making a decision and your emotions got the best of you. What emotion were you experiencing, and what was your reaction?

3. Which emotions help your job performance? Which emotions hinder your performance?

4. Are there emotions that you are more comfortable with than others? Why do you think that is?

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Emotional Expression

1. Are there some emotions you feel more comfortable expressing than others? Why do you think that is? How do you express what you are feeling? Give examples.

2. Describe a time when you regretted not having expressed your true thoughts or feelings about something. What were the consequences (positive and negative) of not expressing your feelings? How would the situation have been different had you been more expressive?

3. Have others ever misread your feelings or thoughts? Why do you think that happened?

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Assertiveness

1. Describe a scenario in which you behaved assertively. What specifically did you do or say that was assertive?

2. What is the difference between assertive and aggressive behavior? Have you ever been perceived as being aggressive? How do you know?

3. Tell me about a time when you disagreed with someone. What did you do/say, and what was the outcome?

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Independence

1. Can you give an example of when you relied on others to make a decision for you? What was the outcome?

2. What feelings do you experience when you need to work independently from others? Do these feelings change (i.e., become more or less intense) over time?

3. To what extent do you involve others in the decisions you make?

4. Can you describe a situation where you went against the grain and made a decision that was not the popular choice? What was the outcome?

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Interpersonal Relationships

1. Describe a time when you had to mediate a conflict between team members. Describe a time when you had to deal with an interpersonal conflict with a team member. How did your emotions differ between experiences?

2. What efforts do you put in to maintaining healthy and effective relationships at work? How do you know when a working relationship is effective?

3. Describe what types of social situations make you feel uncomfortable. What is your typical response in these situations?

4. Describe a time when you had to put extra effort into maintaining a close relationship. What value did this relationship have in your life?

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Empathy

1. Describe a time when it was really important that you were able to understand the way someone else felt. How did you convey this understanding? How did you ensure you understood that person?

2. Describe a situation where you were not as sensitive to someone’s feelings as you should have been. Why do you think this was the case? What could you have done differently?

3. In your opinion, what is the difference between sympathy and empathy? How do you ensure you display these differently?

4. How do you ensure you have really understood how another person is feeling?

5. Describe a situation where you found it difficult to make a decision because of the way the outcome might impact others. What was the result of your decision?

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Social Responsibility

1. What have you done recently to help those in need?

2. Describe a situation where you have placed others’ needs/interests over your own. How often does this type of scenario occur in your life?

3. How do you define “being a team player” in your job? What are some examples of where your success can be attributed to your team and not to you alone?

4. What social issues are of particular concern to you? How do you contribute to these causes?

5. Provide an example of when you had to take responsibility for your actions. How did this make you feel?

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Problem Solving

1. What was one of the most challenging problems you have ever had to solve? Describe the problem-solving process you used to arrive at the solution.

2. How do you think your problem-solving process looks to those you work with? What would they say are strengths of this process? What would they say you could do better?

3. Describe a time when your emotions hampered your ability to make a decision. Why did you get sidetracked?

4. What role do your emotions play in your problem-solving process? How do they help or hinder your ability to arrive at a solution?

5. Describe a time when you made a rash decision. What caused this to happen, and how did it affect others?

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Reality Testing

1. Would you describe yourself as a realist or an idealist? How does this description manifest itself in your job?

2. Describe a time where you incorrectly sized up a situation. What information did you misjudge, and what was the impact?

3. How would others describe the goals you set? What information do you take into account when you set these goals?

4. Describe a time when you should have been more objective rather than relying on a “gut feeling.” Now describe a time when you should have listened to your instincts rather than being so objective. How do you confirm that your “gut feeling” or instincts are accurate?

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Impulse Control

1. How do you typically deal with an impulse to act?

2. Describe a situation where you were impatient and reacted hastily. How did this impact the end result?

3. Describe a situation where it was beneficial for you to act quickly. How did this make you feel?

4. Has your impulsiveness ever created problems for you? How do you think others view your behavior in these instances?

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Flexibility

1. Would others say that you are flexible and open to change, or rigid and set in your ways? What benefits and drawbacks does your typical style bring to your workplace?

2. How do you successfully manage change in an environment where people are hesitant to depart with their old ways of doing things?

3. Give an example of when you found it difficult to adjust to a change in your job. What emotions were you feeling?

4. Do you prefer your work to be predictable and stable, or do you enjoy conditions that require you to change what you do?

5. Describe a time when you had to adjust quickly to changes in your environment. What was your process for changing your behavior/tasks?

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Stress Tolerance

1. How do you tackle stressful circumstances at work? Can you provide an example of when you had to manage stress in order to get your job done?

2. What circumstances are stressful for you? How do you proactively manage these circumstances in order to reduce the stress you experience?

3. How does stress manifest itself in the way you feel (i.e., emotionally, physically) or act? Can you detect the very onset of stress in your body?

4. What strategies do you use to cope with stress? How much do these strategies rely on support from others?

5. Describe a time when it was important for you to remain calm under pressure. What skills or techniques did you use? How were others impacted in this situation?

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Optimism

1. Would you describe yourself as having positive or negative expectations about how things will turn out? How does this impact the way you set goals and objectives?

2. Describe a project/task where you experienced several setbacks. What was your approach to overcoming these difficulties?

3. When planning and setting goals, how do you manage risk? What does your contingency plan look like?

4. Describe a situation where you were overly positive or overly negative in your expectations about how things would turn out. What impact did your outlook have on your performance and that of others?

5. What are some resources or strategies you draw upon in order to stay positive about the future?

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Module 4: Recognizing and Reflecting on Emotional Patterns

Review the sample table Recognizing and Reflecting on Emotional Patterns. Then, look back to your freeze log to see if you can identify any of these emotions from your entries and when they occurred. Fill out the table on the next page. You may not fill out all of the rows, but try to fill out as many as you can. When you are done, answer the two questions that follow.

Emotions

Situations List 1–3 situations,

preferably situations that reoccur.

Related Actions What do you do, either voluntarily

or involuntarily, when you are in this situation?

Related Thoughts What attitudes or ideas do you have

about this situation when you are experiencing it?

I am happiest when

• I pick up my kids from school

• I have time to catch up with my husband after dinner

I whistle and also like to joke around with my kids and my husband. I am also very relaxed.

I try to concentrate on the moment because I know that I don’t get to spend a lot of time with my family. I’m always really focused on my kids and my husband in our times together.

I am very excited when

• I know one of my clients is happy

• When I receive praise from my supervisor or co-workers

I can’t sit still when I’m excited, so I often walk around the office and chat with a few people when either of these things occur.

I don’t gloat about what happened by telling anyone else when these things occur, but it definitely puts me in a better mood and helps me talk more easily with others.

I feel hopeful when

• I start a new project

I usually share my excitement with my family and co-workers.

I’m always optimistic at the beginning of a new project, ready for the challenges ahead of me.

I feel angry when

• I try to delegate responsibilities at work and they aren’t done correctly

I address the situation right away by telling the person doing the work exactly what I think and what went wrong.

I know I have a bad attitude about delegating work; I always complain when I am forced to do it and I pick at tiny errors when things don’t go my way.

I feel sad when

• I visit my father in hospice care

I have a hard time keeping from crying when visiting him, so I don’t say much when I’m there. I let my other relatives do the talking.

I don’t like seeing my father that way, and it puts me in a bad mood for the rest of the day. I really dread going. I wish he wasn’t in so much pain, and I feel so bad for him.

I feel fearful when

• I write up my weekly report at work to send to my supervisor

• I write out bills/balance our family budget

I bite my nails. I also tend to sweat a lot when I am nervous.

I have a bad attitude about my weekly report because my supervisor always says something negative about it. I’m always worried about our family’s finances. I don’t think we will ever have enough extra to do the proper saving we need for retirement.

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Emotions

Situations List 1–3 situations,

preferably situations that reoccur.

Related Actions What do you do, either voluntarily

or involuntarily, when you are in this situation?

Related Thoughts What attitudes or ideas do you have

about this situation when you are experiencing it?

I am happiest when

I am very excited when

I feel hopeful when

I feel angry when

I feel sad when

I feel fearful when

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Emotional and Behavioral Patterns

1. What emotional patterns do you see?

2. What behavioral patterns do you see that are associated with certain emotionally charged situations?

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Module 4: Understanding Your Baseline Frame Questions1. Would you describe yourself as more of an optimist or pessimist? How do you think others would describe

you?

2. Would you describe yourself as thriving or struggling? How do you think others would describe you?

3. Overall, how intelligent do you think you are? How would others rate your intelligence?

4. How good are you at dealing with finances and making sound financial decisions? How would others rate your financial skills?

5. On a scale of 1 (completely unrealistic) to 10 (completely realistic), how realistic do you think you are about yourself, your current situation, and the way the world works?

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Module 4: Goal and Activity Reflection Questions1. What value(s) does your goal align with?

2. What will the goal accomplish?

3. How will you measure whether or not the goal has been reached?

4. Do you have the necessary knowledge, skills, abilities, and resources to accomplish this goal?

5. What is the reason, purpose, or benefit of accomplishing this goal?

6. What is the completion date for this goal?

7. How will you make key activities a habit or part of your routine?

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AppendixEmotions 30

Freeze Log 33

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Emotions

HAPPY

excited energized resolved proud appreciated fulfilledelated enthusiastic valued cheerful confident tranquilexuberant loved gratified relieved respected contentecstatic thrilled encouraged assured admired relaxedterrific marvelous optimistic determined delighted goodjubilant justified joyful grateful alive satisfiedpeaceful hopeful fortunate flattered pleased glad

SAD

devastated exhausted humble terrible disheartened distressedhopeless helpless empty unwanted despised distantsorrowful crushed distraught unloved disappointed disillusioneddepressed worthless deserted mournful inadequate neglectedwounded uncared for grievous pitiful unappreciated isolateddrained dejected burdened discarded discouraged alienateddefeated rejected demoralized disgraced ashamed regretfulresigned slighted apathetic

CONFIDENT

accomplished efficient secure capable intense ableassured fearless solid confident qualified boldbrave healthy successful dynamic self-reliant competentcourageous lively adequate encouraged strong daringdetermined potent assertive forceful together effectiveenergetic sharp sure

SCARED

fearful frantic tormented apprehensive awed timidpanicky terrified tense suspicious reluctant concernedafraid vulnerable threatened shaken anxious perplexedshocked horrified uneasy swamped impatient doubtfuloverwhelmed petrified defensive startled shy unsureintimidated appalled insecure guarded nervous stunneddesperate full of dread skeptical

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Emotions (continued)

EXCITED

alert concerned elated enthusiastic high-strung involvedstimulated aroused busy delighted elevated exhilaratedimpatient curious eager engaged hyperactive intriguedthrilled attentive

ANGRY

strangled humiliated exploited disgusted irritated committedfurious sabotaged throttled smothered exasperated coercedseething betrayed spiteful frustrated harassed cheatedhostile repulsed patronized stifled anguished uptightvengeful rebellious vindictive offended deceived dismayedincensed provoked used controlled aggravated tolerantabused outraged ridiculed peeved perturbed displeasedhateful fuming resentful agitated

HELPFUL

admired amiable compassionate cheerful cooperative genuinegood honest nice optimistic patient soft-heartedtolerant appreciative gentle dedicated passionate sensitivekind sympathetic understanding caring comforting considerateempathic generous giving involved open loyalsharing tender warm-hearted

FRUSTRATED

bothered mistreated dissatisfied sore hassled handcuffedpained rotten dreadful uneasy lousy sufferingdesolate tormented futile irritable hamstrung unhappydispleased irked horrible awful poor foolishdisturbed heavy lost distressed restless abusedhindered destitute

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Emotions (continued)

PLAYFUL

clever quick sharp funny impish bouncypesky amusing chummy frolicsome exuberant teasingmischievous humorous good-natured vivacious light-hearted wittyjoking whimsical

TIRED

apathetic absent listless lethargic disengaged checked outweak beat done bushed drained worn outempty fatigued exhausted weary sleepy overwhelmedswamped numb

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Freeze Log

Record your Freeze Game experiences below. You will fill out more information and reflect on your freeze exer-cises as the module progresses.

Log EntryDate: Time:What am I thinking?What am I feeling?What am I doing?In this circumstance, are my feelings, thoughts, and actions aligned with my values and goals? Is there a better choice for me right now? Why?



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Documents

Behavioral Financial Advice and You Workbook · PDF fileBehavioral Financial Advice and You Workbook ii ... Step 2: Rate each competence relative to its strategic priority (importance