Behavioral economist Richard Thaler explains why financial professionals need to be familiar with psychology. Daniel Kahneman and Amos Tversky legitimized behavioral economics—the study of how people really behave around money, as opposed to how economists say a rational person ought to behave. Read the rest of the article on Time.
If a financial adviser doesn’t know what’s going on in a client’s life, the advice will suffer. Here’s one easy way to fix that. True story: Many years ago, I was meeting with a married couple for an initial data-gathering session. Halfway through the three-hour meeting — the first stage in developing a comprehensive financial…
A tale of youthful stupidity holds the key to giving honest, genuine financial advice. The most important event in my life is one of which I was long ashamed. I was an 18-year-old punk with a monumental chip on my shoulder. You know, the kind of kid certain of his indestructability, sure of his immunity…
Financial planning guru George Kinder has a powerful tool for helping people set priorities for their money…and their lives. Here it is. Few things seem more diametrically opposed than managing money and spiritual enlightenment. But not everyone sees it that way. Some very influential people in the financial advisory community have dedicated their lives to…
To really help people, financial planners have to delve into the the feelings and emotions that drive their clients’ financial decisions. One planner explains why that’s so hard. While most of us financial advisers want to do the best for our clients, we often struggle at the task. The main problem, as I recently wrote:…
I’ve heard it estimated that out of all the financial and estate planning recommendations that advisers make, their clients ignore more than 80% of them. If there’s even a shred of truth in this stat, it represents a monumental failure of the financial advice industry. Unfortunately, I think there’s a lot of truth to this…
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