TrueProfile breakthrough in behavioural economics and profiling launches in Australia
Capital Preferences, a leading behavioural economics, decision science and financial technology business founded in the United States, announces the launch of TrueProfile.com.au – a SaaS behavioural profiling and portfolio assessment platform for Australian advisers.
The award winning platform uses game theory and advanced economics to replace unscientific client risk questionnaires and data collection methods. TrueProfile is built on the reality that clients cannot accurately state their preferences for risk, they can only truly show you the risks they would be willing to take by making decisions. The client experience is gamified and reveals, in minutes, how customers behave when facing risk, spending choices and their goal priorities. Streamlining the acquisition and assessment of clients creates efficiencies, a more robust value proposition and deeper client understanding for advisers.
TrueProfile’s inventor and Chief Scientist is Professor Shachar Kariv, recent Chair of the Economics Department at the University of California Berkeley, one of the world’s top game theorists and decision theorists. The firms’ Research is led by Dan Silverman, Professor of Economics at Arizona State and a past Fellow at the National Bureau of Economic Research. For a quick introduction to Professor Kariv’s work, please see here.
The first product available is TrueProfile Risk Essentials, which reveals some of the most predictive elements driving client behaviour – a client’s loss aversion, risk tolerance and decision consistency. “Loss aversion is one of the silent killers. Some clients are both risk tolerant and loss averse. You don’t see it in a client until it’s too late – loss averse clients feel every dollar lost with a greater intensity.” Says Kariv “Pinpointing loss aversion and the level of consistency in a consumer’s decision-making is a real breakthrough. You can immediately add to your compliance safeguards by identifying those clients who need extra help because of inconsistent decision making” adds Bernard Del Rey, Capital Preferences’ CEO.
The launch of TrueProfile follows 18 years of global research and development, as well as ongoing refinement with leading Australian and global financial advisers to ensure that it best meets advisory and regulatory needs.
“The pre-launch response to TrueProfile has been very positive,” said Jamie Murray, Head of Australian Client Partnerships. “Most advisers are unhappy with their questionnaires. Gamified behavioural economics and engagement is the breakthrough advisers have been waiting for. Systematically staying in tune with clients’ evolving preferences adds to an adviser’s value proposition, and allows them to better differentiate themselves.”
“We all know clients can’t tell us their risk tolerance, or how loss averse they are, or if they have trouble saving. It doesn’t get better by simply asking more or different questions. This research enables client actions which tell you far more than their words. We are moving to an evidence and data driven era in advice and we should welcome and shape this future further,” said Ian Knox, CEO of Paragem, one of the platform’s early adopters. Marcus O’Sullivan, CEO of Affinia agreed and added, “Affinia seeks to bring innovative ideas and technologies to our members. We beta tested TrueProfile extensively with a group of our advisers and the response was very positive. We look forward to rolling the solution out more extensively.” Tony Davison, General Manager at Henderson Maxwell also commented that, “If you are looking to increase client engagement, then best practice interactive tools like these enhance the client experience and can help raise clients’ self-awareness, leading to improved advice outcomes.”
TrueProfile calculates an individual’s tolerance for risk, loss aversion and decision-making consistency with statistical confidence and then ranks an adviser’s range of asset allocation models using a FitScore. TrueProfile’s Risk Essentials product costs $99 per adviser per month, with special pricing available for advice groups with more than 10 simultaneous subscriptions.
Financial advisers and practices wanting better client engagement, consistency of assessment and customer insights, can take this ground-breaking client profiling toolset for a test drive, right now, by signing up for a free 14 day trial at www.trueprofile.com.au.
