Behavioral Finance

Behavioral Finance plays a key role in preparation of FP of clients. Excel calculations, goal setting, ready-to-use softwares, understanding the products to develop the strategies for Financial Planning has streamlined the approach to a fairer extent. However, understanding of Behavioral Finance helps in categorizing the risk-profiling of the clients & building a long term relationship.

PROFILE OF THE DELEGATES:
CFP & High End Distributors/ Area Manager of Life Insurance/Bankers.

The success of the typical client/adviser relationship can be measured in four areas, and each one is enhanced by incorporating behavioral finance traits

The adviser understands the long term financial goals of the client

Behavioral finance helps the adviser understand the reasons for the client's goals. The client/adviser relationship is enhanced because the client feels the advisor truly understands him and his needs.

The adviser maintains a consistent approach with the client.

Behavioral finance adds structure and professionalism to the relationship, which helps the advisor, understand the client before giving investment advice.

The adviser acts as the client expects. This is the area that can be most enhanced by incorporating behavioral finance into the client/adviser relationship

Once the adviser thoroughly understands the client and her motives, the adviser knows what the action to perform, what information to provide, and the frequency of contact required to keep the client happy.

Both client and adviser benefit from the relationship

The primary benefit of incorporating behavioral finance into the client/advisor relationship is closer bond between two. This results in happier clients and an enhanced practice and career for the adviser.