Behavioral Finance

The issue is that she doesn’t listen. She interrupts clients.

We have a woman on our team who seems to enjoy stirring things up.

You will wear a therapist hat on top of your wealth manager cap.

In an ambitious new book, the economist Andrew Smithers rejects core “Newtonian” principles of economics, replacing them with radical departures from conventional wisdom. But as I will explain, some of Smithers’ theories fail meet the standard of empirical verification.

We were planning on an in-person event, but some of our team members were exposed to people who tested negative. How are firms solving for this issue now that we are not really back and still getting sick?

How bullish are we feeling? If the American Association of Individual Investors’ weekly survey is anything to go by, not very. It has been carried out for decades and is much followed as a measure of sentiment. Retail investors are simply asked if they’re feeling bullish, bearish, or neither.

A few weeks ago, I wrote an article on strategies to become more time efficient. Since that time, I have been inundated with advisors asking questions such as…

For years, small accounts have been overcharged and underserved. I’m encouraged, however, by what I see some advisors doing, I wish the rest of the profession were inspired to similarly elevate the value provided for the price charged small clients.

When does researching someone’s background and looking for ways to connect become uncomfortable for a person, wherein they might accuse us of stalking them?

Federal student loan borrowers have been granted another reprieve, but for those who can afford it, the most prudent thing to do is to just fork over the money. Almost everyone has been taking advantage of the moratorium, which allows borrowers to press the pause button on payments without any interest accruing. Just 500,000 borrowers out of 43 million, or 1.1%, were still making payments a year after the freeze was initiated in March 2020 as part of pandemic relief efforts.

Last week we looked at four "stinking thinking" cognitive biases that contribute to poor investment decisions. Here are six more.

Recently one of our best advisors gave notice. He said we don’t “value youth.”

We are a service industry. Before we try to sell clients anything, we need to stop and consider what they want.

I’ll share some of the insights into how advisors can get the most value when they pay for training solutions..

Filling out your March Madness bracket provides insight into how investors select assets, structure portfolios, and react during volatile market periods.

Advisors tell me they don’t have time to focus on what they need (and often want) to do.

I’m having an existential crisis with a few of my advisors.

As a financial planner, it’s your job to help the client understand why certain investment steps are in their best interest when their intuition may be telling them otherwise.

I am interested in any guidelines on paying and compensating my assistants.

Your firm would take off if you could replicate yourself. The problem: You can’t.

Help your clients see beyond the weekly budget. Help them enjoy the things they want and need.

My father is about to celebrate a very big birthday. He retired at 60 and has been retired for 40 years. It makes me realize how very narrow minded we are in our profession about the way we speak about retirement.

The Rest of the Story was a radio show that aired from 1942-2008. Host Paul Harvey revealed little known facts that were previously not reported. The rest of the Federal Reserve story is that it is just pretending to be in control, and the rest of the Russian invasion story is about China and the U.S. dollar.

Tragically, life has been upended for those who were living in a peaceful Ukraine only a few days ago. Now their country is under intense military attack and creeping occupation. Many fear for their lives. Others have become refugees.

We have the new program installed, but no one is using it.

Jasmin and Ryan recently exchanged ideas about trading apps and new software that can help educate investors about key investment principles.

Advisors can choose from five approaches to meet their clients’ income needs in retirement, each with its own merits and drawbacks. Those strategies attempt to solve for a central goal – ensuring that clients don’t run out of money – a risk that is illustrated by my wife’s catering business.

Advisors who reject bucketing strategies because they won’t invest as many as five years of assets in low-yielding securities are exposing clients to risks that threaten their standard of living in retirement.

Most analysts expected some action on interest rates from the U.S. Federal Reserve in 2022 — but maybe not the five rate hikes they’re now pricing in. Inflation was clearly driving upwards, but we’re seeing much higher, more consistent price increases.

I’m not averse to having clients tell their friends and family about me; I’m just averse to making it sound like they need to do it because we need them to do it.

As a financial planner, I don't get paid just to develop financial strategies for clients. I get paid to help them put sound advice into action. Advice without action accomplishes nothing.

We have team members turning on one another because much of the new client servicing standards we agreed to set in place are not working.

I don’t know if we should downsize and move into a smaller space, give people the option to WFH and then lose the great camaraderie that has always made us so great.

They might ease our fears or satisfy an inner need, but predictions about the markets or the economy are useless to our clients.

I examine two biases that often handcuff investors and push them to make the wrong decisions at the wrong time.

When assets get overvalued and get into crazy territory, explaining their overvaluation feels like playing this “infinity times infinity” game. But at least, if we line up different crazy valuations next to each other, it is going to be easier to distinguish levels of craziness.

The yearly paying out of lump sums to reward top talent is such a standard, established practice, questioning it may seem a little quaint. More than three-quarters of U.S. companies use performance incentives of some kind. Yet the fact remains, we don’t really know how well they work. Do they encourage people to work harder and smarter?

Recently one expert asked whether the letters I receive are authentic or perhaps I make them up. I’d like to use this column to address this and ask financial professionals to consider things we often don’t talk about in this industry.

Is the failure of the value factor over the last decade due to the inability of book value to incorporate so-called “intangible assets,” such as the intellectual property that has propelled companies like Amazon, Alphabet and Apple? New research provides the answer.

Our advisors are good at what they do, but a couple of our best performers are terrible communicators.

Assuming the value that clients obtain from an advisor is distributed in a bell-shaped curve, the average client obtains considerable value from the average advisor – and even from a mediocre one.

I find it difficult to act as a social worker. I’ve no background in psychology. I’ve no skills to help warring couples find their bliss and agree on a center point when they have differing opinions.

We spent a small fortune in 2020 and 2021 on training for our advisors. We need them to get better at business building and finding new sales opportunities.

Here’s how advisors can maximize their event marketing ecosystem to drive more appointments from their in-person and digital events.

Millennials are growing up. After spending years splashing out on everything from skydiving excursions to Instagrammable vacations in Peru, 30-somethings with decent-paying jobs are making lasting purchases, buying cars, houses and everything inside them.

As we close out the year, I’ll provide my top five advisor observations from my work with large and small practices.

We need to do year-end planning but in past years it hasn’t gone well.

The extreme volatility from November 26 to December 3 caused many clients to panic. By using deep analytics, advisors can illustrate that this episode – and others like it – were not that unusual.

Why doesn’t my staff see my appreciation in action and how could they be upset about donations to organizations they care about?

It’s that time of the year where we reassess relationships, segment our client activity and look at where we want to spend our energy in 2022. This year, the topic of centers of influence (COIs) has come up.

We mix up logic with emotion, data with information, and information with wisdom. Steven Pinker’s new book, Rationality, is a step-by-step guide to unmixing these and using hard-headed logic to arrive at useful conclusions.

How can advisors help clients who lack sufficient savings for retirement – those who accept the need to take on risk to achieve capital growth, but insist on a minimum income to fund essential expenses?

New research shows that the surge of market participation through the Robinhood platform has been driven by young, uninformed users who lack the skill to generate “alpha,” resulting in increased noise and volatility for all investors.