Financial Advisor Success Podcast Ep 454: Turning Abstract Behavioral Finance Research Into Practical Tools To Better Client Outcomes with Dr. Daniel Crosby

Host: Michael Kitces
Guest: Dr. Daniel Crosby (Chief Behavioral Officer, Orion)
Date: September 9, 2025

Episode Overview

This episode dives deep into the practical application of behavioral finance research for financial advisors. Dr. Daniel Crosby elaborates on how he has taken complex academic concepts and baked them into easy-to-use technology tools that enable advisors to better understand clients, identify blindspots, and improve both financial and life outcomes. The conversation ranges from money personality assessments to positive psychology-driven goal discovery and the essential practice of advisor self-reflection. Advisors will walk away with actionable insights for strengthening client relationships and bringing more empathy and nuance to their planning process.

Key Discussion Points & Insights

1. The Challenge: Translating Behavioral Finance into Tangible Advisor Value

• Client Perceptions vs. Advisor Value:
  Clients consistently rate behavioral and emotional support as the least important value advisors provide—yet advisors see firsthand its impact in turbulent markets (11:46).

  "No one likes to think of themselves as being silly or hot-headed or emotional or in deep need of some reining in."
  —Dr. Daniel Crosby (12:16)

• Industry's Framing Problem:
  Advisors often position themselves as “saviors” protecting clients from irrationality, which can feel condescending or off-putting and exacerbate the advisor-client power dynamic (16:20).

2. Embedding Behavioral Insights into Technology

• Subtle & Overt Design Choices:
  Features like color schemes, the way questions are phrased, and the order of information presentation can nudge client engagement and self-perception (17:16).

• Behavioral Tools at Orion:
  Dr. Crosby's work focuses on “training, tools, and technology.” His flagship contribution is creating tech-enabled assessments that surface clients’ money attitudes, support positive psychology, and link goal-setting to what truly matters.

3. The B520 Assessment: Five Dimensions of Money Personality

Developed from interviews with over 400 couples, the B520 tool evaluates individuals across five key spectrums:

• a. Communication Style:
  Direct vs. Indirect. Comfort (or discomfort) with talking about money.

• b. Worry Level:
  How much someone worries about financial matters (largely independent of actual wealth; akin to neuroticism in personality models) (24:25).

• c. Time Orientation:
  Spend Today (YOLO) vs. Save for Tomorrow (future-focused). This is a major point of contention within couples (22:29).

• d. Individualism vs. Collectivism:
  Is money a tool for personal use or a family/community resource? This axis varies by gender and culture (26:51).

  "Non-white, non-Western women tended to be more collectivistic...white Western men tended to be more individualistic."
  —Dr. Daniel Crosby (27:18)

• e. Importance of Money:
  To what extent is wealth a measure of “how you’re doing” in life? For some, net worth and self-worth are tightly linked (32:22).

Key Takeaway:
Clients on one end of each spectrum frequently judge those on the other, and most people's money scripts go unexamined until brought into relationship or high-stakes planning (34:00).

"These things have been operating in the background of their lives...unspoken, unhighlighted, unarticulated, and they're just driving their behaviors in ways that are unchosen because they're unknown to them."
—Dr. Daniel Crosby (35:05)

The B520 Tool:

• 20 questions, takes about three minutes.
• Can be done by individuals or couples—results for couples highlight agreements and areas for conflict or groupthink.
• Advisors receive custom language to foster understanding or prompt reflection.

Access: Available within Orion Planning as the “B520 Behavioral Finance 20 Questions” tool (41:49).

4. Positive Psychology & PulseCheck: From Deficits to Flourishing

• Shift from Correcting Biases to Supporting Flourishing:
  Early behavioral finance focused on irrationality and error; now, it increasingly supports using money to build a flourishing life (47:05).

• PulseCheck Tool:
  Based on Seligman’s “PERMA” science of well-being, PulseCheck prompts clients to:

  • Rank six drivers of flourishing by importance (51:57):

    1. Fun/Leisure
    2. Engagement (deep, meaningful work or activity)
    3. Relationships
    4. Meaning (devotion to something greater than self)
    5. Personal Growth
    6. Physical Health

  • Rate themselves (1-10) on each.

  • Tech identifies largest gaps between importance and satisfaction, prompting goal discussion (financial or otherwise).

  • Becomes a new, science-based approach to client goal discovery and ongoing planning conversations.

  "What I love about it...is it knits the client and the advisor together and it allows them in a very practical way...to talk about important, meaningful things that lead to client well-being in a way that still feels pretty grounded and practical."
  —Dr. Daniel Crosby (56:13)

5. The Crucial Role of Advisor Self-Reflection

• Mirrors Before Windows:
  The best use of behavioral finance is first as a mirror for the advisor—to understand their own biases—before using it as a window onto client behavior (29:30 and 85:24).

  "There is a qualitative difference between an advisor who has been thoughtful about his or her values, preferences, approach and one who has not. They show up as infinitely more humble and approachable."
  —Dr. Daniel Crosby (85:24)

• Industry Biases:
  Financial advisors, as a profession, often share a similar money profile (direct communicators, low worriers, save for tomorrow, individualistic, money-importance oriented), which can cause friction and blindspots when working with diverse clients (43:38).

• Reducing Client Fears:
  Research reveals clients fear two things most in an advisor meeting: judgment and jargon. Advisors who understand their own biases are less likely to project judgment (85:24).

6. The Real Power of Psychology in Financial Advice

• Empathetic Listening:
  Dr. Crosby shares a personal story of a friend unable to diversify out of concentrated company stock—a situation resolvable only after Crosby asked about why, yielding an emotional (not rational) explanation (74:55):

  "You're asking what you're asking of me is betrayal...this company gave me a chance, every good thing in my life and you want me to stab them in the back."
  —Dr. Daniel Crosby (75:45)

• Knowing-Doing Gap:
  Most people already know the basics of sound investing—the challenge is actually implementing them due to emotional and psychological blocks.

Notable Quotes & Timestamps

• On the pitfalls of emphasizing behavioral hand-holding:

  "If you are overly transparent about [behavioral coaching] being your biggest value add, you're asking the client to accept something that is nearly impossible to accept."
  —Dr. Daniel Crosby (14:35)

• On diversity in teams (and couples):

  "Psychologically diverse teams tend to have more fights and take longer to make decisions, but if they can overcome that tendency to squabble, they actually make better decisions, make more money and their businesses do better."
  —Dr. Daniel Crosby (37:37)

• On defining success:

  "In my more lucid moments, true success to me is working on those two things: deepening my relationships with the two handfuls of people who really matter to me and trying to search out truth and learn more about myself and the world."
  —Dr. Daniel Crosby (87:56)

Timestamps for Key Segments

| Segment | Timestamp | |-------------------------------------------------|-----------| | Opening & Dr. Crosby’s Background | 03:11 | | The Limits of Behavioral Coaching as Value Prop | 11:46 | | How Tech Embeds Behavioral Insights | 17:16 | | The 5 Dimensions of Money Personality | 22:23 | | Cultural/Gender Skews in Money Attitudes | 26:51 | | The Self-Reflection Imperative for Advisors | 29:30 | | Adoption & Use of the B520 Assessment | 36:35 | | Positive Psychology & the PulseCheck Tool | 47:05 | | The 6 Dimensions of Flourishing | 51:57 | | Practical Concerns: Where Therapy & Advice Meet | 58:04 | | Advisor Money Personality Biases | 43:38 | | Empathetic Listening in Practice | 74:55 | | Reflection on the Profession & What Works | 84:13 | | Defining Success: Relationships & Learning | 87:56 |

Memorable Moments

• Dr. Crosby's description of the origins of the B520 Tool—rooted in real marriage conflicts and unconscious money scripts (17:16 – 36:35).
• The distinction between “window” and “mirror” approach to behavioral finance (29:30 and 85:24).
• The moving story of a client who resisted diversification, explained not by irrationality but by deep-seated loyalty (74:55).

Conclusion: Practical Takeaways

• The next evolution of behavioral finance is less about identifying "irrationality" and more about supporting human flourishing and well-being.
• Advisors should leverage practical tools—like B520 and PulseCheck—to open meaningful conversations and uncover blindspots, always starting with self-reflection.
• The advisor-client relationship, grounded in empathy and a lack of judgment, is more powerful for outcomes than any bag of behavioral tricks or technical expertise.

For advisors seeking more resources on these tools:

• B520 and PulseCheck are integrated within Orion Planning.
• For further reading, Dr. Crosby recommends works in positive psychology and materials from the research teams at Morningstar.

Host: "Thank you, Daniel, for joining us on the Financial Advisor Success podcast."
Dr. Crosby: "Thank you so much."
(89:13)