Your Client is Neurotic. Now What?

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Dan's new book for millennials, Wealthier: The Investing Field Guide for Millennials, will be published in April 2024 and available on Amazon.

You play a crucial role in guiding your clients towards sound financial decisions. But the path to responsible investing is complicated by individual differences in personality traits and decision-making processes.

A recent (2023) study, "Personality Differences and Investment Decision-Making," illuminates the intricate relationship between personality traits and investment behavior, offering valuable insights you can leverage to optimize client interactions.

The primary findings

The study's primary findings highlighted the significant impact of the “big five” personality traits – openness, conscientiousness, extraversion, agreeableness, and neuroticism – on investment decision-making among affluent American investors. Notably, high neuroticism and low openness correlate with a lower likelihood of equity investment, indicating a risk-averse behavior.