Advisers urged to reconsider psychology in financial planning

‘The best financial advisers take time to get to know their clients’

Sahar Nazir
clock • 1 min read

Financial advisers should take heed of the influence of human psychology on investment decisions in order to avoid the detrimental effects of herd instinct and cognitive biases, Continuum says.

A Chartered financial planner from the Plymouth-based IFA said advisers should offer "a well thought out financial plan" when dealing with "the fear of the unknown" in today's "uncertain" investment climate. Ben Alcock added: "Uncertainty breeds fear, and fear often drives us to make irrational financial decisions." He suggested that "the best financial advisers take time to get to know their clients, and what drives their behaviours". "We all believe that we are rational people, especially when it comes to our money. However, psychology suggests otherwise," he said. "Many consu...

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