Financial DNA: What Is It And How Does It Work?

Financial DNA: What Is It And How Does It Work?
04 Mar 2016

I have often said investing money for people is the easy part. It’s dealing with investor’s emotions that makes this endeavor more challenging. Helping new investors uncover their biases and perceptions about money will help strengthen the relationships they have with advisors. A new study from Leon Morales at DNA Research backs up this point. A 46 question quiz helps identify each investor’s own personality types. Here is a summary of the study’s findings.  Where do you see your personality fitting?


1.  Goal Oriented Type Personality:

– Considered an “aggressive” investor

– They look at their investments in a consolidated view and are bold-rational investor

Other Behavioral Biases Include: Over Trading, Overly Optimistic, Risk Taking, Fast Decision Making


2.  Lifestyle Personality:

– Very Instinctive

– Don’t do research; Respect advice from professionals

Other Behavioral Biases Include: Over Spending, Following the Herd, Reliant on Instincts, Very Trusting


3.  Stability Personality:

– Emotional Investor – Averse to risk & loss

– Needs Guidance – Tend to be nervous/emotional

Other Behavioral Biases Include: Fear of Regret, Lack of Confidence


4. Information Personality:

– Detailed in Nature – Need a Lot of Information

– Like Transparency and Agendas

Other Behavioral Biases Include: Paralysis by Analysis, Suspicious, Over Emphasis on Benchmarks & Ratings


As you can see, many items go into investment recommendations and portfolio design for investors. “We don’t have people with investment problems, we have investments with people problems.” This saying really says it all. Personal biases, experiences, and beliefs can and often do cloud good investment behavior. By the way, this includes financial professionals as well. We are not immune to having our personal biases too!


Good luck!




Jeffrey Johnston

Jeff has over 30 years of experience in the investment industry. He currently holds his FINRA Serices 6, 63, 66, 7, 24 & 51 licenses with LPL Financial as well as his health and life insurance licenses.