Wealth managers urged to 'focus on behavioural alpha' to help clients

Understanding emotions that drive decisions can help firms boost returns

Sahar Nazir
clock • 1 min read

Wealth managers need to focus on behavioural alpha to help clients avoid the losses they make from “poor and emotionally driven financial decisions”, according to Oxford Risk.

The firm said in its whitepaper ‘Behavioural Engagement Technology: Using technology to understand, map, and improve engagement in personal finance', that understanding and guiding the emotions that drive investing decisions can help wealth managers boost returns for clients, but the industry needs technology to deliver at scale. Clients on average lose 3% per year from a combination of holding too much cash and making mistakes with their invested assets, Oxford Risk has found. Errors include focusing on familiarity and domestic assets from well-known companies, chasing current and po...

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