Bill Hortz's picture

"Our technology is not supplanting the advisor’s historical relationship, we’re in fact enhancing it. We’re not a robo product, we’re a bionic advisor product." JeremyFloyd, President & CEO, Finworx

[The Institute for Innovation Development  interview series invites innovation experts, innovative business leaders and emerging FinTech companies to talk to our readers about their latest innovation activities. The series seeks to learn from innovative business creators, uncover innovation best practices, and apply these insights into a financial services business model.

We recently talked with Jeremy Floyd, President and CEO of Finworx: a turnkey, persona-based communication platform that combines behavioral analysis and automated digital marketing to help improve the lives of financial advisors and their clients. Highlighting the kind of business alchemy that may be needed in today’s financial services industry, Finworx is one part FinTech company, one part digital marketing agency, and one part investment research firm.]


Hortz: Your value proposition to advisors of offering them the ability to deeply get to know and most effectively communicate with their customers - the way that firms such as Amazon, Netflix and Facebook do - is very intriguing. Can you tell us more about the specific technology and processes you use to uncover the behavioral knowledge about each client?

Floyd: So I think there are really two parts to developing our behavioral understanding of the advisors’ clients. First of all, our technology accumulates client data from a number of sources, including client survey data, the advisors’ insight into their clients, the client’s digital footprint, and publically available information. This data allows us to assign each client to one of our proprietary investor personas.

The second part of developing that behavioral understanding involves leveraging the power of big data analytics and machine learning to truly understand users’ behavior, then translating that into insights and action for advisors. What that means is that we take the additional data that surfaces from the client’s interaction with our software to improve our understanding of the client over time. As we get more information from email opens and clicks, website traffic, etc., we get a better sense of what they’re reading, what topics resonate with them, and their general communication preferences. It’s a really powerful tool when placed in the hands of a financial advisor, who’s now empowered to truly improve communication with and outcomes for their clients.

Hortz: How many “personas” did you develop and how did you determine them?

Floyd: To develop the personas, we used a combination of traditional risk typing from conservative to aggressive, personality typing, particularly the DISC personality traits, and our analysis of various emotional and cognitive behavioral biases.

This research resulted in four proprietary personas, as well as a fifth general audience setting in the event that a client has minimal data available—for example, a brand new client, someone who has an extremely common name such that scraping data is difficult, or an older client who has next to zero digital footprint. These personas represent an investor’s willingness to take risk, emotional and cognitive biases, and their likely behavior as determined by data analytics and an investor questionnaire.

Hortz: To what degree are they reliable and consistent? What research do you have that supports this?

Floyd: There is a well-established body of research around investor biases and personality typing, coming from psychologists, economists, and behavioral finance researchers. Our approach is grounded in this research, though the legitimacy of this approach is also established by our ongoing measurement of communication—in other words, “how effective is our communication?” In addition, we have developed and tested our own investor questionnaire, first using internal data, then validated using a growing population of external, representative clients. We continue to monitor and validate the results on an ongoing basis to ensure reliability.

Hortz: Can you compare and contrast client behavioral discovery using outward behavioral analysis versus using some form of psychometric testing?

Floyd: It’s important to note that our approach does include a form of psychometric testing, in addition to outward behavioral analysis. We believe this gives us the best of both worlds. While an external data set is good, it may not always pick up the nuance necessary for true communication accuracy, for the reasons described earlier. That’s why we enhance it with psychometric testing in the form of our behavioral risk assessment.

It’s also important to note that we also go above and beyond outward behavioral analysis or psychometric testing by giving the advisor the ability to influence the persona algorithm. We allow the advisor to add their own non-digital touchpoints as well as information accumulated over years of relationship building with clients, some of whom may not have a digital footprint for us to study. We believe this only enhances the data set.

Hortz: Once you isolate a client’s persona, how do you translate that into an effective communication strategy?

Floyd: We start with the belief that each person responds to communications based on their unique behaviors, biases, and communication preferences. The persona types are the basis of most Finworx communication.

We’ve spent a tremendous amount of time developing pre-defined client journeys for each persona, and we have the ability to track engagement with that journey in order to do two things: 1. Personalize the journey for each specific client in real time. 2. Improve future iterations of the pre-defined journey for clients overall.

Hortz: How does a financial advisor use this in-depth behavioral knowledge to drive improved client outcomes?

Floyd: Well, there are a few factors at play here. First, the clients’ outcomes largely depend on their ability to accept coaching and advice from their advisors. This means the advisor is playing a trust role—this is a sentiment we hear echoed by advisors all the time. They want to be the trusted advisor. They want to be the first phone call their clients make when they’re facing a financial decision. To build that deeper trust relationship, we keep the advisor in front of their clients with fresh, relevant communications. We want to give the client plenty of opportunities to get in touch with their advisor, thereby building trust.

At the same time, we can use the content itself as an educational tool. For example, if you have a client persona type who tends to be anxious and prefers big picture information, you’d never send them an in-depth market analysis. But if you have a highly analytical client who likes to stay highly informed, you might send them something more in-depth to show them that you’re paying attention to what’s going on and not insulting their intelligence by sugar coating the facts. In other words, communications are a constant education and reinforcement of maintaining the proper risk level in the clients’ portfolios.

Hortz: Any last bits of advice for advisors?

Floyd: It’s really clear that the advisor of the future will need innovative new technologies to meet regulatory requirements and enhance their client relationships over the long term. An advisor that embraces technology can become more efficient, communicate better, and ultimately provide better client outcomes. So whether that technology is Finworx, or another solution, we would urge advisors to take a candid look at their business, assess where they want to be in the long run, and then start examining comprehensive solutions that will get them there.

This interview was originally posted on Financial Advisor Magazine Online.


The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). For more information click here.


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