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An Old Idea Offers a New Way to Predict Client Behavior

August 7, 2018

Financial advisors can employ a behavioral assessment tool known as the Kolbe Index to help them better deliver financial planning services to different types of clients, according to FA magazine.

The Kolbe Conative Index, first introduced by Kathy Kolbe in 1992, is a series of questions designed to determine a person’s strengths and weaknesses in accomplishing certain tasks, according to an old Washington Post article from 1994. During employment interviews certain firms use the index to understand if a candidate is right for the job, although it has both supporters and detractors, FA magazine writes.

But the Austin, Texas-based husband-and-wife advice firm 994 Group uses the index to help them tailor how they serve various types of clients, according to the publication.

The 36-question assessment asks participants how they’re likely to behave across an array of scenarios, FA magazine writes. The test helps determine a person’s “instinctive method of operation” and provides hints on how to use that effectively, according to the publication.

For Kristen LeClair, co-founder of 994 Group, the Kolbe Index isn’t just helpful for her and her husband, she tells FA magazine. The index helps them approach couples who may have differing styles of communications and “bridge the communication gap,” she says, according to the publication.

For a spouse who prefers a bottom-line approach, the advisors prepare a bullet-point list, according to LeClair. For those who like “the telephone-book version of information,” 994 Group will send information ahead of meetings, she tells the publication.

At client meetings, this can help prevent one of the spouses feeling like the other isn’t engaged, she tells FA magazine.

“One thing we know about money for sure is that it is a very emotionally charged subject. For example, about 50 percent of marriages that end in divorce, end because of money issues. The Kolbe index helps us better understand people, how they work, and the communication they will be most receptive to,” she tells the publication.

By Alex Padalka
  • To read the FA Magazine article cited in this story, click here.