Behavioral Finance

Let's keep our client meetings focused and manageable. By doing so, we not only respect their time and attention but also increase the likelihood of them taking the necessary steps to achieve their financial goals.

Members of successful teams generally get along with each other. Bev Flaxington offers some insights on how to cement those relationships.

Questioning leads to closing. A number of the advisors I work with are pretty good at engaging, asking questions and caring about the answers. However, they are really uncomfortable with the close. I promised you I wouldn’t give you coaching on “closing,” so I won’t.

I’ve identified long-term care as the greatest unsolved challenge in the field of goals-based retirement investing. This doesn’t make me Sherlock Holmes. Anyone who has requested a quote for LTCI knows we’ve got a problem.

There is a demographic that likes to work with you and consistently hires you – you probably just don’t have it defined for you and your team. If you don’t know who you work best with, there is no way that your prospect efforts will be profitable. Rather, they will be coincidental.

Determining your client’s risk tolerance is a critical first step in constructing a tailored investment portfolio.

I often hear my clients talk about the struggles with the next generation and how hard it is to work with them. Here are some of my best tips for how to lead the next generation (or potentially any generation that needs a little boost).

Risk. It’s a tiny word for a critical investment concept, one that necessarily merits ample discussion by advisors with their clients. Unfortunately, evidence suggests this may not be happening evenly across the advisory industry.

Toyota Motor Corp.’s research unit and Hyundai Motor Co.’s Boston Dynamics are joining forces to speed up development of humanoid robots with artificial intelligence.

There are only a couple of workable options. You can’t tell someone like this she isn’t listening or that you feel shut down when you speak with her. That will only lead to defensiveness.

By bringing wealth advisors and attorneys together with medical professionals, clients can receive more comprehensive care. Family offices and their clients can mitigate risks through a “triangle of support” formed by financial, legal, and medical advisors.

The US Justice Department is considering asking a federal judge to force Google to sell off parts of its business in what would be a historic breakup of one of the world’s biggest tech companies.

It is more common that teammates really enjoy the people they work with and have one another’s backs, but they don’t particularly want to give up personal time to spend more with workmates.

Storytelling allows you to describe what you do, and whom you do it for, in a way that is transferrable and understandable.

Just as the industrial revolution changed the way goods are manufactured and consumed, so the technological revolution will do for services. Once something can be made at scale, the market for it can expand and be segmented. The same goes for financial planning.

Care about being a financial “doctor” and don't assume all is well because you have addressed the surface issue. Here are some ways to avoid delivering a poor bedside manner when clients need help.

It doesn’t take away from one’s success to share things that are troubling in order to deal with them differently and perhaps find another way. While you want to be careful, of course, about to whom you share your secrets or your inner feelings, you don’t want to bottle them up indefinitely.

Christine Benz is Morningstar’s director of personal finance and retirement planning, but she’s written a book that evokes Viktor Frankl as much as Bill Sharpe, aiming to go well beyond the mathematics of saving for, and living in, retirement.

The money manager who hasn’t cracked open the Journal of Finance, Journal of Financial Economics, Journal of Portfolio Management, or Financial Analysts Journal for the past few years probably hasn’t lost any steps.

Try to understand specifically where you are going off track. Many times these are behavioral disconnects. If you have a boss who is highly attuned to rules and quality and you are someone who doesn’t notice details as much, you might be failing in their eyes. First, start with seeking to understand.

This week I had the chance to run a half-day workshop helping seasoned, successful advisors learn techniques for emerging as strong leaders, so I’ll share some of the information here in this column.

The late Jack Bogle — father of the first index fund — famously loathed their exchange-traded offspring, warning that it only incentivize speculative trading among “fruitcakes, nut cases and lunatic fringe.” Fast forward to 2024, and critics warn a new generation of ETFs are designed to do exactly that.

Try a combination of things to get people energized. Often once people do engage, they find themselves enjoying it!

Whether someone’s problematic relationship is with food or money, recovery involves addressing the trauma and issues that underlie the behavior.

When feedback is done well, it can be the greatest gift you give to someone.

While high rates can make borrowing costlier and slow down housing markets, they also open favorable opportunities in financial products like annuities. In other words, annuities are back and stronger than ever before!

It is overly optimistic to think people will simply change if they don’t see and understand the hurtful nature of what they are doing.

When I run sessions on dealing with difficult people one of the things I consistently point out is the gift that difficult people give us: they are known and their behavior is repeatable and can be anticipated.

Family Feud, a popular game show when I was growing up, would ask contestants to guess how a group of people had answered a specific question. It served as a regular and early reminder for me of the importance of supplementing one’s thinking with external perspectives.

Dollar cost averaging involves committing money to the stock market gradually, rather than all at once. This time spent out of the market leads to lower returns, but also to commensurately lower risk.

It’s hard to work daily with and for someone who clearly doesn’t like you or want you to succeed.

When dealing with millennials and often with more seasoned investors, it’s important to understand their barriers to acceptance of a boring approach to investing.

Whether the discussion is about training, coaching, or consulting on roles and responsibilities, the topic of behavioral style – that is, sameness and differences – often gets missed.

It’s taboo in many cultures to admit you might want to have a life outside of your work, so a lot of people keep it to themselves because they don’t want to be seen as weak, or uncommitted.

Conflicts are everywhere in financial planning. They exist in all fee models, whether they be commissions, assets under management, fixed fee, or hourly. Any time money changes hands there are conflicts of interests.

I love questions like this one – the chance to think creatively and brainstorm “what could be” without the stress of having to do something right now. I have some suggestions to start thinking about what you could do when you have more latitude and less financial responsibility.

In many situations, my clients will tell us they hear “crickets” when they ask for feedback. In large forums many people are simply uncomfortable bringing things up.

No coach is going to be able to work well with your team unless you are very clear about expected outcomes. What will success look like in working with the coach?

A well-thought-out long-game thesis can stay intact for long periods with slight adjustments when needed. Like a long and straight drive in golf, when your macroeconomic thesis proves correct, a good portion of your investing job is done.

This week’s column is devoted to brushing up on what you know you need to do well — and making sure you are actually doing it!

Yes, differentiation is hard, which is why developing a niche target market has become so popular recently. It can dramatically reduce the number of competitors. But even advisors who focus on a niche have competition.

I work on facilitation and teambuilding quite a bit with teams of all sizes, so I am always either coming up with my own new ideas for engaging options or scouring the market to learn what others are doing.

The person has to be open to listen, learn and see how their behavior is not serving them and why they need a new approach. They have to want to figure out how to change and they have to be desirous of trying something new.

There’s no denying that human emotions play a role in managing money. Even someone who’s usually level-headed can get caught up in excitement, fear, or uncertainty.

The bankruptcy of Steward Health has become the latest cautionary tale about private equity’s involvement in health care. Cerberus Capital Management’s purchase in 2010 of several Massachusetts-based nonprofit hospitals was meant to be a life preserver for the struggling chain, but instead its woes deepened, compromising patient care.

If you want to get someone’s attention and influence their thinking to gain traction with your idea, you need to get into their shoes enough to present a case they can understand and relate to!

Few advisors are prepared for the massive change coming to the advisory profession. It will not be a slow rollout over decades. In three to five years (if not sooner), how advisors do business will fundamentally change.

The most important thing when it comes to managing your time, priorities and life is to get your priorities straight in the first place. It can be helpful to think in categories: work, family, spiritual, health, charitable inclinations and so on.

Time and again, Jerome Powell has made it clear. Financial conditions, the Federal Reserve’s key lever for cooling the US economy, are tight.

Wealthier is the ultimate investing playbook, revealing the not-so-secret “secrets” of the financial advisory community and equipping investors with all the tools they need to effectively invest on their own.

Can artificial intelligence help you have stronger, more authentic relationships with human clients?