It is rational to have moments when clients find themselves scared or anxious, the challenge is how we then manage those emotions, reactions, and decisions. Louis Williams shares his insight...
The certainty effect coined by Kahneman and Tversky in 1979 explains how we have a strong desire for certainty and therefore prefer to choose a sure or certain gain over a risky one. For example, if given two options, option A where there is 100% chance to win £900 or option B, 90% chance to win £1,000 and the remaining 10% chance of receiving nothing, then the majority of us (about 80%) opt for option A, because it is guaranteed that we will be rewarded. We choose clarity over chance even if this means we make decisions that lead us to be less financially profitable. Interestingly...
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