Welcome back to the thirty-eighth episode of the Financial Advisor Success podcast!
My guest on today’s podcast is Sarah Fallaw. Sarah is the founder and president of DataPoints, a technology company that is creating behavioral science and assessment tools for financial advisors to use to better assess, understand, and coach their clients’ financial behaviors.
What’s fascinating about Sarah’s work with DataPoints, though, is the way that they have applied research rigor to the fundamental question of: what are the financial behavioral traits that lead people to actually turn their income into wealth. As advisors, many of us are already familiar with the concept of the mild-mannered “Millionaire Next Door” who, through steady frugal savings behaviors, has managed to accumulate substantial wealth, without being flashy about it. Well, as it turns out, that original research was done by Thomas Stanley – who was Sarah Fallaw’s father – and it’s his initial work that she has now extended even further, and turned into a series of assessment tools for advisors to use with our clients!
In this episode, we talk about Sarah’s research on how people build wealth, the key financial behaviors and traits – including conscientiousness, financial literacy, frugality, planning, responsibility, confidence – that lead to building wealth, why and how they measure “social indifference” (how sensitive you actually are to trying to keep up with the Joneses) to understand someone’s wealth building potential, and the way that they’ve turned all of this research into a series of assessment tools that we as advisors can use… whether it’s giving the assessment to young accumulator prospects to really understand how likely they are to save and accumulate wealth, or to give it to new or even existing clients just to better understand where their strengths are, and where their potential financial challenges will be in the future. We even explore how these kinds of behavioral assessment tools could even become a way to show the true value of financial advice – where we provide the assessment to clients year by year, and actually show them not just how they’re accumulating wealth over time, but how we’re actually helping them to change their financial attitudes and behaviors for the better!
And be certain to listen to the end, where Sarah talks about the challenges in actually launching a technology company that provides solutions for advisors, how “perfection can definitely be the enemy of good” when it comes to getting a new company launched (true for both technology and advisory businesses!), and why – even when it comes to starting a technology company – it’s still all about focusing in on a narrow niche of the particular type of target clientele (or target financial advisor) that you want to serve.
So whether you’ve been curious to learn more about the research on what actually leads to wealth-building behavior, are curious about a new technology solution you could use to identify clients (or even prospects) with good wealth-building potential, or simply want perspective on what it takes to build a successful business, I hope you enjoy this episode of the Financial Advisor Success podcast!
source https://www.kitces.com/blog/sarah-fallaw-datapoints-podcast-building-wealth-behavioral-assessment-tools-thomas-stanley-millionaire-next-door/?utm_source=rss&utm_medium=rss&utm_campaign=sarah-fallaw-datapoints-podcast-building-wealth-behavioral-assessment-tools-thomas-stanley-millionaire-next-door
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