Why is it so hard for people to make good decisions around savings, investments and money in general?
Anxiety Adjusted Returns - Overcoming the Cost of Being Human
On June 4th 2018, at the EY offices in London, Our Head of Behavioural Finance, Greg B Davies and Carl Richards of Behavior Gap had a no-sacred-cows discussion on the most provocative frontiers of financial advice and suitability
In last week's superb FT article on matching investors to investment risk, John Kay rightly points out the foolishness of using recent historical volatility as a proxy for (future) investment risk. However, whilst focussing on the problems with establishing the risk of investments, he only briefly touched on determining appropriate risk levels for investors.
Risk profiling is essential to providing good advice, and to ensuring regulatory compliance. Unfortunately, the profiling field is rife with misunderstanding and poorly designed assessment tools, leading many advisers to view risk profiling as an unnecessary box-ticking exercise, rather than a simple and effective way to improve client outcomes.
A new independent review has set out how government and the financial services industry can work together to build a culture of social impact investment in the UK.
The FT Advisor ran a story on Suitability and the advice process under MiFID II yesterday.
Greg Davies recently featured in the Financial Wellbeing podcast with Chris Budd.
A recent article for Money Marketing raised the question of whether risk profiling tools should have standardised scales
A recent article about investor risk profiling in the Financial Observer claims, ‘assuming that changing attitudes and investor behaviours were commensurate with a change in their appetite for risk was often “flawed thinking” as the behaviour of investors in situations where a high level of risk was prevalent was not always a function of risk tolerance alone’.
There is some concern within the industry about the upcoming MiFID II regulatory framework, expected to come into force on January 3rd 2018, specifically regarding suitability and appropriateness.
Dr Greg B Davies speaking about New Vistas in Risk Profiling at the HUM Conference 2017
Dr Greg B Davies' short talk on Breaking Beyond Nudge at London Behavioural Economics Network @LondonBEnet 5 year anniversary event.