By Suresh Sadagopan, CFP, India
Do we change the fundamental course of our lives based on what is happening in our environment? We may do some course correction, but fundamental changes are unlikely and we most likely persist with what we have believed in all along.
Continue reading Behavioral Finance: How to Help Clients Avoid Bad Investments
By Simon Hassan, CFP, New Zealand
It’s a real challenge protecting clients and ourselves from natural “thinking mistakes”.
Behavioral economics has drawn our attention to the fact that the central assumption of traditional economics – that we behave rationally, often fails to hold.
Continue reading Investment Behavior: How to Help Clients Steer Clear of Irrational Decisions
By Taylor Liao, CFP, Chinese Taipei
As a financial planner, it was hard for me to understand what it was like for my clients. Consumers get their information from and are influenced by several mediums such as the media and product sellers. Banks or fund houses, for the sake of selling more products, will release market information that a market has potential to grow in the future and usually this information causes consumers to invest, no matter how high the price of the fund is.
Continue reading How Does your Advice Process Reflect the Findings of Behavioral Finance?
By Daehong Kwon, CFP, Korea
Recently there have been an increasing number of attempts made to integrate behavioral finance into financial planning. It is indeed only recent that behavioral finance has been systemized as a science, getting a lot of limelight, even though studies on human behavior and psychology have been done for a very long time.
I have learned from my experiences of talking to clients that knowing something is one thing and putting it to action is quite another. More indicative of the limitation of human beings than making a mistake due to lack of knowledge might be making one even with knowledge. One good
Continue reading The Lemming Effect and Its Impact on Financial Planning
By Cora Pettipas, CFP, Canada
There have been many times I have questioned people’s sanity in their relationship with money. My most vivid memory of this was when I waddled into a Starbucks (I was eight months pregnant). On the way to the counter, I passed a young opulent-looking couple sipping lattes and saying to their toddler son, “you are never going to college, no you’re not, no you’re not!”
Continue reading Behavioral Finance: Progress Makes Perfect
By Mukesh Dedhia, CFP
In India, about 10 or 20 years ago, if you were lucky enough to have a relative who was an insurance agent, your family would receive financial advice. With growing complexity in financial products, more people started looking for somebody to help them make the right decisions.
Continue reading Trends in the Financial Planning Industry
By Steve Helmich
All of you know and hopefully love the 6 stage advice process. It’s what financial planning is built on – the foundation of great advice. It is familiar, reliable and structured – as a planner you can manage your time and your business because you know where you stand. But what about your clients?
Continue reading How do Clients Feel During the Financial Planning Process?