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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Industry needs to move away from 'chunky and complicated' reports

Industry needs to move away from 'chunky and complicated' reports

‘You should remember that the UK is a nation of skim readers’

Isabel Baxter
clock 08 May 2024 • 2 min read
Paraplanning 'not always' a stepping stone to becoming an adviser

Paraplanning 'not always' a stepping stone to becoming an adviser

‘Depends on the person and if they want the client-centric element’

Isabel Baxter
clock 08 May 2024 • 2 min read
OpenAI is the 'biggest financial adviser in the world'

OpenAI is the 'biggest financial adviser in the world'

'The transformative power of generative AI is undeniable’

Sahar Nazir
clock 08 May 2024 • 1 min read