Behavioral Finance – The Flexible Advisor

Ep 102: Coaching Parents Through Some Tough Lessons – With Sarah Newcomb, Ph.D.

By The Flexible Advisor | January 5, 2024

Helping clients address multiple objectives can be fraught with any number of misconceptions, ingrained assumptions, and fears. Laura Gregg and David Partain talked with Sarah Newcomb, Ph.D., founder of The Thrive Financial Empowerment Center, to talk about balancing the desire to finance children’s higher education with the need to work toward a secure retirement. Leaning into core tenets of behavioral investing, Sarah helps to clarify some of the psychological hurdles parents face in this situation and shares practical strategies to help advisors add value to the decision-making process.

Listen in as Dr. Newcomb discusses:

● Common preconceptions that may not serve the client or the children.

● Key points that can shift the narrative in the advisor/client dialogue

● The importance of including the child in the college finance discussion

● The opportunity for parents to model financial problem-solving

● How behavioral investing concepts are becoming core competencies in the advisory industry

● And more

Resources:

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About Our Guest:

Sarah Newcomb, Ph.D. is a behavioral economist and Founder of the Thrive Financial Empowerment Center. Through writing, speaking, and coaching, she teaches people of all stripes to build lives they love with the resources they have. As a subject matter expert, Dr. Newcomb has worked with corporate behavioral science teams at HelloWallet, Morningstar, and Edward Jones, where she helps financial advisors understand and respond to aspects of psychology that affect financial decisions. In all her roles, Sarah aims to adapt the findings of academic research to practical use in the financial lives of ordinary people, and to ground innovative approaches to financial advice in well-established psychological theory.

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Ep 97: The Art of the Nudge – With Patrick Fagan

By The Flexible Advisor | August 4, 2023

We know that internal biases form specific client personas which, in turn, shape a person’s approach to making financial decisions. Financial professionals can use those biases as a “nudge” rather than an obstacle to build more productive client relationships.

In this episode, Laura Gregg and David Partain speak with Patrick Fagan, Chief Scientific Officer at Capuchin Behavioral Science, about using clients’ underlying biases to your advantage.

Patrick discusses:

How and why we all use cognitive shortcuts
How to use those shortcuts as a “nudge” to build trust
Helping clients accept advice that may seem contradictory to their beliefs
Applying nudges with different client personas
Focusing on emotional and functional outcomes
And more

Definition: The term Alpha is used in finance as a measure of performance, indicating when a strategy or portfolio manager has managed to beat the market return or other benchmark over some period.

Resources:

Connect With Patrick Fagan:

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Connect With David Partain:

About Our Guest:

Patrick Fagan is the Chief Scientific Officer at Capuchin. Patrick is a behavioral scientist and lecturer with a decade of experience applying that scientific approach for organizations around the world, and a Sunday Times bestselling author. Previously the lead psychologist at Cambridge Analytica, Patrick is a co-founder and the Chief Scientific Officer at Capuchin Behavioural Science.

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Ep 84: Why Settle for “Satisfied” Clients? — Brendan Frazier on the Value of Emotional Connection

By Robyn Walter | September 24, 2022

Provide good numbers and exceptional service and you’ll have a satisfied client. Create a personal connection, and you may be surprised at the results.

In this episode, Laura Gregg and David Partain speak with financial advisor Brendan Frazier, founder of Wired Planning and host of The Human Side of Money podcast. Brendan offers three simple steps to help you exceed mere ‘satisfaction’ in your client relationships.

Brendan discusses:

Why customer satisfaction is no longer enough
A new 80/20 rule that can bring immediate results
The striking benefits of emotionally connected advisor/client relationships
And more

Resources:

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About Our Guest:

Brendan Frazier is the founder of Wired Planning and the host of The Human Side of Money podcast. Recently named a top-100 financial advisor by Investopedia, Brendan helps advisors enhance the trajectory of their businesses through more meaningful client interaction.

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Ep 83: Getting to Yes! Why You Need to Acknowledge Behavioral Finance — With Michael Pompian

By Robyn Walter | September 9, 2022

Most advisors recognize that, when it comes to making investment decisions, a client’s emotions can derail a plan.

Equipping yourself with knowledge on behavioral finance and financial personas could be the key to a more successful approach to ensuring your clients stick to their plan.

In this episode, Laura Gregg and David Partain talk with Michael Pompian, CFA, CAIA, CFP, an author and authority on behavioral finance, about his research on the topic and his practical experience understanding how client emotions can impact your practice, your clients’ experience and their investment outcomes.

Michael discusses:

What drove him to research behavioral finance
The crucial distinction between investors’ cognitive and emotional biases
Why this should matter to an advisor
And more

Resources:

Connect With Michael Pompian:

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Connect With David Partain:

About Our Guest:

Michael Pompian, CFA, CAIA, CFP, is the founder and chief investment officer of Sunpointe Investments, an investment advisory firm to entrepreneurs, corporate executives and multi-generational families, based in St. Louis, Missouri. He is the creator of the Pompian Behavioral Model of investor classification, as well as the author of five books on behavioral finance, including his latest Behavioral Finance and Your Portfolio (Wiley, 2021).

As an experienced advisor, author, and pioneering researcher on the topics of behavioral finance and emotional investing, his books have helped thousands of financial advisors across the globe build better relationships with their clients. His newest work is designed to help individual investors recognize and better manage their investing biases, either independently or with their financial advisors.