Follow These 5 Steps to Minimize Client Anxiety: Orion's Daniel Crosby

Doing so earlier risks a well-known psychological tendency known as "the backfire effect." That's when a client doubles down on an irrational belief because [the advisor] has threatened that cherished belief without a sufficient relational buffer in place.

5. Process. The client can experiment with the new behavior in a measured way. This might be homework, listening to a podcast or reading a book or article.

It might also be tiptoeing with the new behavior into increased saving or a slightly riskier asset allocation.

But whatever is being asked should be subdivided into a series of smaller asks that can be experienced and shaped over time.

In a book you co-wrote with Charles Widger, founder of Brinker Capital, "Personal Benchmark" (2014), you advise investors to worry less about "the economy" and instead focus on "your economy." Please explain.

Most people focus on externalities when considering their financial lives — the economy, the president, the Fed, the course of a virus — and ignore more powerful, present and controllable realities that exist within them.

Focusing on things that are out of our control leads to a psychological phenomenon known as "learned helplessness." That can induce burnout and lack of desire to keep on investing.

But by focusing on their "personal benchmark" or "personal economy," clients can make decisions that are both within their power and germane to their specific financial situation.

What is "behavioralize"? This describes how you serve Orion clients.

It's making sure that every part of our process has been considered and engineered in a way that maximizes positive outcomes for the clients. Everything from the placement of a widget to the color of a graph to the order in which a series of questions is presented materially impacts client behavior.

So we're working to ensure that our tech is as human-friendly as possible. This includes creating a risk questionnaire that accounts for emotionality — in addition to the more typical tolerance and capacity measures.

It also has a goals-based investing platform that uses mental accounting and a couples money assessment designed to show partners how their attitudes about money intersect and diverge.

All the tools empower our advisors to deeply understand and have better conversations with clients.

With regard to investing itself, you advocate "buy what you don't know." Why is that good advice?

When people buy what they know, they tend to double- and triple-load risks in ways that aren't immediately apparent to them.

Familiarity bias says we tend to confuse the things that we know with things that are safe. An extension of this is home-country bias.

People tend to already gravitate and overweight the things they know. This lays risk upon risk.

For instance, if you live in a [place] whose economy is dependent on the strength of, let's say, agriculture, then your home value is also dependent on the strength of agriculture; and your employment too. You're [likely] overinvesting in agriculture stocks as well.

Personality science says that most people have, to differing degrees, what's known as the "Big 5 Personality Traits." Knowing what they are can be used to strengthen and deepen client-advisor relationships, you've said. What are the five?

They were discovered simultaneously through multiple streams of research into lexical analysis. The five common pillars are:

1. Openness to experience: someone's willingness to be experimental and try new things. It's also correlated with intelligence.

2. Conscientiousness: a person's preference for organization and careful planning or for disorganization and being careless. This is the trait most tightly correlates with professional success.

3. Extroversion: the degree to which someone is outgoing and gregarious in social settings. It's not to be confused with social skill, since introverts can be highly socially skilled, though less energized by social interactions and demonstrating a preference for smaller groups.

4. Agreeableness: the extent to which someone is willing to "rock the boat" in social situations. If someone asks for feedback, for example, a person with low agreeableness will be brutally honest, whereas someone with high agreeableness will [consider] the impact on that person's feelings first more than the literal veracity of the feedback.

5. Neuroticism: Proneness to stress and anxiety. Obvious implications for risk-taking and the degree to which the client will be demanding of an advisor's time, especially in a market like the present one.

Clients with high neuroticism show lower risk composure scores, which indicate the capacity to make risk-reward tradeoffs and the likeliness for emotional override that short-circuits their risk tolerance.