Street Advice



It's not uncommon when discussing research findings with financial advisers to see some eyes roll to the back of heads, others search in vain for an exit door and a handful engage with the content all bright-eyed with fervor. Sadly, the most common subject matter in these briefings is old school investment forecasts and rehashed Reserve Bank statistics, resplendent with death by chart slide delivered as a less than kind form of anesthesia. Maybe, just maybe we can momentarily shift the content toward a more personal and pragmatic theme and see if we can't bring to bear a distilled set of practices and tools for advisers that directly equip them to better understand the behavioral profiles of clients and tailor the right service mix at the right time. From a purely selfish perspective, gleaning the necessary knowledge to keep your clients saving and contributing safeguards your firm's revenue stream doesn't it?

These practices and tools are a by-product of evidence-based behavioral models intended to shape financial advice across the life cycle of clients. In our own practice where we are focused on the design and development of financial health management apps we embrace a number of models including:

  • The Transtheoretical Model (TTM)
  • Personal Savings Orientation (PSO) construct
  • SEPIA a Persuasive Design Model
  • Behavioral economics and Choice Architecture

These are used in tandem with machine learning to shape an app experience that aligns with the behavioral state, financial proclivity and identity of individual users so they persist in affirmative behavior over time.

The next few articles will try and distill common sense recommendations and practical tips in plain English for advisers from this collection of arcane acronyms and obtuse titles.

The Transtheoretical Model or Stages of Change

This model, devised by Prochaska & Velicer (1997), was initially used for health-specific cessation therapies including alcohol and drug abuse. Its primary aim is to help understand the processes of change required to guide people intentionally through an affirmative behavioral change.  It was more recently applied to the challenges of credit counselling Xiao & Wu (2007) and has gained in popularity for supporting consumer finance behavior; albeit poorly in most instances.

People rarely spontaneously adopt and sustain a new life shaping behavior; they tend to progress and regress through stages as outlined in the diagram.

The Transtheoretical Model Stages of Change 

The Transtheoretical Model Stages of Change 

TTM also maps the underpinning change processes that guide progression through stages in the following table.


Individuals, by and large do not travel these stages as a linear journey; life circumstances and environmental fluctuations tend to shape the path as a spiral pattern.

Using the Model with Clients

Determine their Stage of Change

This is simply done using a self-reporting process. Ask clients to answer the following 4 questions with a Yes or No. The responses allow for a discreet categorical measure of each individuals Stage of Change.

1. I am intending to take action about my finances in the next 6 months.

2. I am intending to take action about my finances in the next month.

3. I have taken action about my finances within the past 6 months.

4. I solved my financial problems more than 6 months ago.

Precontemplators (Ambivalents)

They will answer No to all 4 questions.


They will answer yes to Statement 1 but no to all others.


They will answer yes to Statement 2 and no to the others.


These people answer Yes to Statement 3 and No to Statement 4.


They answer yes to Statement 4 only.

Shaping your Advice and Interventions

Grubman, Bollerud & Holland (2011), provide an interesting view on mixing motivational interviewing with the stages of change. providing valuable insight and reflection,  well matched to the needs of Australasian advisers. 

As our practice is in the business of providing Advisers and Clients with apps to support financial behavior change we have tested the waters and unsurprisingly found that a vast majority of test users of the app are in either the Preparation or Action stages. For the sake of this exercise then let's begin with the Pre-Contemplation and Contemplation Stage.

The Ambivalents - helping the Fence Sitters

There are 5 TTM processes you can take advantage of throughout this stage but firstly start with your interpersonal approach to discussions.

Bear in mind most of these people have moved to this stage after first being in denial about financial problems. They are still likely prone to impulse and overspending. As such they will reveal evidence of resistance which requires you to exhibit empathy and a balanced understanding of the triggers that drive their spending, the temporary satisfaction it brings them and the upside of shifting that activity to a more measured approach.  While the client is aware of the overspending they have not yet firmed up a clear understanding of the practical means of bringing it under control. There is as yet no strong understanding of the relationships between cause and effect. They are in your office seeking help as they are fearful they cannot go forward with change on their own.

Social liberation

This step is about gently sharing the availability of options in the client's  external environment that encourage people to begin or continue a change. For example company Kiwi Saver:Australian super or  subsidized Health Insurance plans; a high school graduate exploring scholarship options.

This helps bring to the fore the notion that social norms have moved in the direction of supporting savings behavior for example.  A lot of other people are "doing it" and it's easy to start with.

Emotional arousal using dramatic relief

Dramatic stories of how others people’s lives have changed may encourage some  to save themselves. Try curating and sharing content (magazine articles, video) of similar others experiencing a change in fortune and well-being on the back of altering financial behaviors as well as instances of those who have spiraled into self destruction e.g. mortgagee sales. You can have the contrasting experience of others speak to the polar opposites of behavioral management and the consequences.

Environmental re-evaluation

This is a more pragmatic variant of emotional arousal and is fact-based, succinct, without being dramatic. Look to make use of very simple and clear graphics, numbers and images that depict consequences of overspending versus thriftiness. This enunciates the extent of benefits or negative consequences in a dispassionate manner. Never assume your clients share an aptitude for numeracy and death by chart; cater for different learning styles as one hat does not fit all.

Self re-evaluation

This means thoughtfully assessing a problem and imagining what could happen if you solve it with improved behavior such as spending control. For example, “If I start to save, I can help my children toward a first home deposit or ensure they leave university with minimal or no debt.” This envisioning helps prime the individual toward an identification with the desired behavior; " I feel like I am a saver that can help pay for my kids' education". Get them to put together a simple collage of positive images that reflect back these visions in a concrete way.



Bringing behavior design into play

From the field of behavioral design we can bring to bear the mechanisms of Observability and Intelligibility to better equip the client with the knowledge and understanding they need to fully appreciate their current and potential future states given a number of possible changes to behavior.


Straightforward access to key bank and associated  accounts reveals the facts. 


Observing transactional data from accounts provides insights into expenditure patterns. Printed statements or online account access both serve to deliver this for the client. The point of the exercise is to begin a conversation and listen to the thoughts, ideas and rationale of the client. 

This activity is all about causality; associating negative trends with less than ideal decision making.  It can be as simple as discovering what happens when the client reduces take away meals to twice per month and extrapolating that over 1 to 2 years.

This relies on Social Comparison. For example what the average Kiwi Saver investment is for others of similar income, age and occupation.  Using advanced technology such as DOSHI with its machine learning, clients can see how their persistence with positive behaviors affect social-based performance comparisons of financial progress or regress in real-time.



At the heart of Observability and Intelligibility must be the means to explain causality, place current financial state and outcomes within a peer-based context and allow adviser and client to monitor changes to these at any time. Observability acts to support the transition between the Pre-contemplation to Contemplation stage and Intelligibility underpins the necessary processes of the Contemplation stage, Laurillau,Calvary,Foulonneau & Villain, (2016).

Your actions as an Adviser during this period is as always supportive but it probably also edges toward calm, dispassionate forensics and letting information speak for itself. Use should be made of Chat and Instant Messaging systems without turning into a stalker.

Getting them ready-The Preparation Stage

Your clients when they have reached this stage have acknowledged their current state and how they arrived there and have accepted there are practical, achievable means of improving their lot. They will begin to engage you more for information, clarification and reassurance. Your focus should be on encouraging them to think for themselves in small steps and see if they can't tell you what they need to change and how; use an open-ended questioning style. "What changes are you considering?"; "What is your next step?".

Your role now evolves more strongly into a mentorship capacity, encouraging autonomous decision-making but at the same time doing your level best to improve the financial literacy of the client. The greater their self efficacy, the more likely they are to think autonomously and believe in their behavioral change.

Key TTM Processes

Self liberation

Here we look to encourage a solid commitment to change.   Setting public goals by the client will be a powerful means to incite forward thinking and action. These goals then become the yardstick for self-regulation particularly with the transparency afforded by account motoring. Access to straightforward goal setting calculators makes sense here. Look to make use of apps like DOSHI that provide this and allow the user to simply answer very basic questions with the option to Save and Share the results. This helps develop confidence and an understanding of cause and effect.



Behavioral design functions


Typically uses a set of abilities that allow induction and deduction. What this means is providing the facility for your clients to learn through simulation and experimentation. With the NZ FUNDS web app,  clients are provided with the ability to adjust the relative proportions of investment types and see an immediate change in outcomes. More advanced, evidence-based apps like DOSHI directly enable the client to see exactly which of their financial behaviors affect their comparative score for financial health and also predict their cash-flow outcomes. Spreadsheets can emulate this kind of functionality at a very basic level and can be used depending upon the numeracy skills of the client.

Next article - Action and Maintenance Stages


Grubman, J., Bollerud, K. and Holland, C. (2011). Motivating and Helping the Overspending Client: A Stages-of-Change Model. Journal of Financial Planning, 24(3), pp.60-67.

Laurillau, Y., Calvary, G., Foulonneau, A. and Villain, E. (2016). SEPIA, a support for engineering persuasive interactive applications. Proceedings of the 8th ACM SIGCHI Symposium on Engineering Interactive Computing Systems - EICS '16.

Prochaska, J. and Velicer, W. (1997). The Transtheoretical Model of Health Behavior Change. American Journal of Health Promotion, 12(1), pp.38-48.

Xiao, J. and Wu, J. (2006). Encouraging Behavior Change in Credit Counseling: An Application of the Transtheoretical Model of Change (TTM). SSRN Electronic Journal.

Dr Daryl Foy

Dr Daryl Foy is a Behavioural Scientist who specialises in the design of effective health behaviour change apps based on evidence including his own validated models for optimising persistent use. He consults to industry on how-to integrate persuasive design into LEAN product development as well as conversational UI. He can be contacted at