Behavioral Finance

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?

Points of Return often argues for caution on stocks. It never argues to get out of them altogether. That’s because history demonstrates that over long time spans it’s very dangerous to be out of the market altogether.

A manager’s role is to build upon their employees’ strengths, help them see how they can improve in areas where they are already strong, and make shifts in areas that aren’t working as well for them.

A few years ago, I was speaking to financial advisors about saving, spending, financial well-being, and life well-being.

When one is running their own business, it can be easy to try something, and if it works, then great; if it doesn’t, then you simply move on to the next thing.

A lot of financial planning software today is built to solve math problems, but what advisors really need to do is solve human problems.

Many asset allocation strategies operate at the level of industry groups. Industry momentum -- buying past winners and selling past losers -- is present in U.S. data going back to the early 2000s.

The article to which this “Concerned American” refers was about investing in low-cost diversified index funds and U.S. Treasury instruments, such as TIPS. It wasn’t about politics, nor was I even thinking of the election as I wrote the piece.

How to overcome obstacles when your firm is growing too fast and bringing in too much business?

Establishing a sense of financial responsibility in your children is a daunting yet important step in their development.

Our profession is being transformed by powerful, AI-based technologies that will replace human-based financial advice. They will drive down costs, reduce valuations, and deflate the multiples paid in M&A transactions.

I just completed a coaching call with an advisor I have worked with for many years. In his honor, I will profile a bit of the journey we’ve had together to illustrate how every advisor (yes, every single one) can learn how to sell effectively and do so in a comfortable manner.

With an understanding of reversion to the mean, it is possible to contextualize market volatility for investors in a way that helps them view it more constructively.

Is it possible to run a firm with someone you don’t like?

Now that our merger is taking place and we have a clear set of steps to take, six people who were not involved in the decision-making process are pushing back on everything.

I’ve been through several excellent management training courses and seminars during my 25+-year career serving the advisory profession. But I always walk away with the feeling that I’m too nice.

How can we ensure cultural fit when bringing on a junior advisor to help with succession planning?

Using time in all the best ways possible should be a lifelong goal and something you want to encourage your clients to think about too.

Understanding what structured notes are, how they are used, and what types of investors might consider them is key to determining if they are a good investment for an individual’s situation.

Learn to avoid the most common and damaging errors by considering these five key questions before you hit “enter.”

Good managers are drowning the superior performance potential of their best ideas in a sea of bad ones.

I cannot get away from the feeling of guilt that I am sacrificing time with my children to run this business.

A groundbreaking study has shifted the spotlight from data and numbers to a softer skill: emotional intelligence (EQ).

Why are we prone to irrational behavior as investors? Why do we too often sell when we should buy and buy when we should sell? Market history is replete with examples of this behavioral dynamic.

This week’s column shares some ideas around the importance of a unique learning environment and gives you some insight for your professionals to improve their skills and reach higher levels of excellence.

Let’s look at each DiSC style and how you can adapt to make them more comfortable with you.

Your choice is stark: Adapt to engage this emerging demographic or risk obsolescence.

Among the critical yet often overlooked aspects in planning are healthcare expenses. How are families addressing this, and what expertise do wealth advisors bring to the table?

“Sometimes I don’t even know why I am invited to the meeting, and even after it ends I don’t know why I was there!”

I want to hear from you whether it is wrong to believe that numbers matter most and not everyone should try to be a psychologist with their clients.