Forget Investor Behavior, What About Advisor Behavior?

Most advisors are familiar with how detrimental emotional investing can be to a clientís portfolio and just how crucial it is to guide clients away from the common buy-high-sell-low pitfall. But what about advisor behavior? If advisors arenít aware of their own market beliefs, they may be susceptible to making the same mistakes as their clients, according to some industry experts.

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Comments (2)
Advisor bias is probably the least recognized element of the client advice process. While a lot of attention has been directed towards client investment risk, too little to date has focussed on the behavioral components of client interaction. The vast majority of financial advisors strive to set the agenda for the clients as they see such an approach as part of their brief when, in fact, it should be more of being a firm guide. Advisors need to have enough awareness to modify their behavior on a client by client basis. To get a deeper understanding of the issues involved have a read of the White Paper "Dealing with Financial Planning Risk"
Posted by Eamon P | Friday, November 09 2012 at 4:17AM ET
I really enjoyed this article and appreciate we need to pay more attention to the advisor's blindspots and "humanness" in the process of working with clients. Nice work and its nice to see Hugh Massie's work get noticed.

Kathleen Burns Kingsbury
Author, How to Give Financial Advice to Women
Posted by Kathleen K | Monday, November 12 2012 at 12:43PM ET
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