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Behavioural Finance

Help your clients navigate the ups and downs of the markets by understanding the various behavioural biases and emotions underpinning our investment decisions.

What is behavioural finance?

The way an investor behaves can often have a big impact on their financial outcomes and underpins the success of investments. Behavioural finance is a tool for understanding the psychological, social & emotional factors that influence financial decision-making. It can be leveraged to remove cognitive barriers that impede effective decision-making.
Top- down representation of investor behavior

Differentiate yourself

While other advisers talk about standard deviation and risk tolerance, you can better explain risk-reward, answer “what if” questions, make panic-proof plans and identify investments to manage volatility. Show clients common emotional missteps and how you can help keep them on track.
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Keep your clients on track

Ensure your clients are on track to achieve their goals (long-term, medium-term and short-term) and that investments are not disrupted by market highs and lows.
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Identify behavioural biases

Behavioural biases – loss and envy in particular – can be a challenge for many investors. Remain the voice of reason for your clients.
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Attract and retain new clients

Strengthen client relationships and build trust with your clients as a financial coach.

Play a role in building disciplined investing habits

There are many biases that can affect our judgment when it comes to dealing with our finances. The important thing is to be aware of them and to be able to spot them when they occur. Educate your clients and guide them on their journey to developing disciplined investing habits.
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Diversify investments

Across locations, sectors, asset classes, and adopt a long-term asset management strategy over several years or decades, as opposed to the constant search for "good deals".
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Educate about the basics of finance

Including mastering the difference between asset classes, learning more about investment products and understanding the risk and performance potential of each investment.
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Build disciplined investing habits

Markets are often volatile – especially in the short term. It is better to build a disciplined approach to investing that will help in navigating turbulent markets.