Behavioral Finance

Contrary to what financial theory predicts, new research from Europe shows that the elderly accumulate assets later in life than expected, likely because they want to leave bequests, are receiving pensions, or are reluctant to part with assets such as their homes.

During our holiday party, one of my longest tenured advisors came up to me to say how appalling he thought it was that we held such “an expensive party.”

Allan Roth’s recent article, The 4% Rule Just Became a Whole Lot Easier, promises too much, makes inaccurate comparisons and blurs the notion of risk.

From the earliest days of artificial intelligence (AI) and machine learning (ML) in the 1950s, practitioners have spoken of using it for investment fund management.

The client had been with us for more than 15 years. When she left, I called her to ask if there was anything we could have done differently or better.

The pay negotiation season is looking increasingly fraught this year as workers fret about 8% inflation — and their job security.

We have someone we have been carrying for quite some time and we need to ask him to leave.

Mohamed El-Erian sees the rollercoaster ride in financial markets, with Friday’s surprisingly strong US jobs report producing the latest drop, as another lesson for Chairman Jerome Powell and his Federal Reserve colleagues.

As we enter the end of the year to celebrate other holidays, consider improving your emotional intelligence (EQ) and connecting with your clients in deeper and more fulfilling ways.

This article explores the efficacy of PLIBs against a retirement income strategy that does not include an annuity, as well as strategies which allocate to either a SPIA, a DIA, or a GLWB. I used a utility framework for this analysis.

With all the market ups and downs, we are not as profitable as we have been historically.

Why do team members often resist change?

What is new about my thinking on money scripts is that, unless they are generational, they are not written for us by someone else.

How come the focus is always on the leader and never on the team members getting on board and playing their part?

I will share some insights for leaders in large and small firms to make change happen, manage results and continue to grow your businesses.

We are debating whether to expand our niche or whether to expand at all.

Dietrich spent the previous 15+ years in senior business development roles with Morningstar and brings extensive experience in indexing and direct indexing across the asset management and wealth spaces

Your inability to recognize the biases you have prevents you from managing a more successful practice.

I find it hard to like someone when I don’t know the context of what I would do to interact with them.

Daniel Kahneman and Richard Thaler won Nobel prizes for their work in behavioral science, propelling that discipline to the forefront of the advisory profession. But new research shows that behavioral science produces results that are no better than a simple model, and mutual funds based on it are no better than an index fund.

I was recently approached by a recruiter about a president position at another advisory firm.

I’ll share some insights as you encourage your team to be more open-minded and innovative and to help with facilitating change efforts within your organization.

Our leadership is forcing changes on us at a rapid pace that don’t make sense.

While everybody's been sweating over the housing and labor markets, the office market has been streaking toward a hard landing.

Frequent flyers are accustomed to turbulence on some flights. Indeed, many expect it. Despite such anticipation, however, the turbulence can once in a while create significant anxiety among even the most seasoned travelers.

The leading tail-risk potential is the increased odds that high inflation remains stubborn, and the Fed continues to fight those odds aggressively.

How can we design and deliver our advice in a way that clients implement it? Enter the commitment device.

I need someone to tell me if it’s time to get off this treadmill or if things will change and I can go back to being exhausted only on Thursdays and Fridays instead of every day of the week.

Direct indexing is the fastest growing segment of the asset management industry. In this interview, Brandon Thomas of Envestnet explains how direct indexing helps clients gain low-cost, tax-efficient exposure to asset classes, ESG and quantitative strategies.

There are serious, well-documented mental health issues suffered by financial advisors that have been exacerbated by the pandemic.

Several of our team members have had some very difficult life experiences over the last year.

Investor risk tolerance drives portfolio decisions, yet many financial advisors are rightly concerned about the accuracy of risk tolerance assessments. Why is it so hard? How can we get it right?

We are frustrated by the lack of new clients this year.

The classical notion of 1940 investment advice has been hijacked and replaced by the SEC with a weak, distant cousin.

I will share some ideas for how create a special event to honor a client.

We have a team of advisors who are the kings and queens of gossip.

A close look at the historical data suggests that the excess performance of stocks relative to bonds occurred mainly in two historical periods and has been inconsistent over the last 25 years.

We are trying to grow our marketing team.

The views you often read on advisor compensation models and their future are misguided.

In the last two decades as an investment advisor, I’ve often been wrong – about markets, products and their providers, investors, the government, and the advisory business. Here are my top 10 items I’ve got wrong.

Some of our funds have underperformed, although we tout our ability to “not lose as much when the market goes down.” But we’ve lost way more than the market has over the last few weeks in a few of our strategies.

According to MPT, following certain steps leads to the optimal portfolio for the individual’s risk and return preferences. But, like executing a perfect squat, knowing how to build the optimal portfolio is not enough.

Given the Fed's enormous impact on markets and its extremely hawkish stance due to inflation, a well-reasoned inflation forecast is imperative for investors.

Have you seen a situation where the person running the advisor team is former college football star and every single story – I mean every one – is about football?

The leader of our firm is not a nice person.

Among the many factors cited in academic research, only a handful have been sufficiently reliable for use in asset pricing models. One of those is momentum. New research shows that it works globally – even in China, a country whose markets have not historically exhibited momentum.

The issue is that John is very involved in politics in our community and his political leanings are the total opposite of the rest of the family and of mine.

There’s no doubt what Monday’s biggest market news was in New York.

None of us can control markets, but it’s critical that our clients know how they have performed relative to appropriate benchmarks.

We have a terrible time with internal meetings. They don’t happen. They happen but there is no agenda.

The Supreme Court’s decisions on abortion and gun safety reinforced how ideology polarizes politics and prevents civil discussion and progress. Market ideology has also polarized discussion and harmed advice standards.

I’m finding some questionable accounting as I am going through the financials from the last few years.

Incorporating a wide variety of portfolio risk mitigation techniques is essential to address unforeseeable macroeconomic challenges.

I’m having a hard time training one of our newer advisors on how to be a good listener.

I will demonstrate how financial advisors can combine behavioral finance and deep analytics to have a robust conversation with clients during financial turmoil, showing compassion and understanding on the one hand, while telling a compelling long-term story on the other hand.

Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.