The Psychology of Financial Professionals and Their Clients

Investments & Wealth Monitor, September-October 2019, pp. 15-20

8 Pages Posted: 18 Oct 2019

See all articles by H. Kent Baker

H. Kent Baker

American University - Kogod School of Business

Greg Filbeck

Pennsylvania State University

Victor Ricciardi

Washington and Lee University; Social Science Research Network (SSRN)

Date Written: September 24, 2019

Abstract

Financial professionals and their clients exhibit a wide collection of behavioral biases that many times result in imperfect judgments and outcomes. Understanding these cognitive and affective factors are important for financial planners and advisors to ensure their clients are receiving the best financial advice and investment information. The authors describe some common psychological biases and offer solutions for overcoming these biases. The paper draws on some themes from the authors’ book Financial Behavior – Players, Services, Products, and Markets published by Oxford University Press in 2017.

Keywords: Investor psychology, personal finance, financial planning, biases, behavioral finance, behavioural finance, financial behavior, behavioral economics, cognitive issues, affect, emotion, belief perseverance, confirmation bias, control, hindsight, framing, mental accounting, familiarity, overconfidence

JEL Classification: A12, D81, G00, G30, G10, M00, M10, M41

Suggested Citation

Baker, H. Kent and Filbeck, Greg and Ricciardi, Victor, The Psychology of Financial Professionals and Their Clients (September 24, 2019). Investments & Wealth Monitor, September-October 2019, pp. 15-20, Available at SSRN: https://ssrn.com/abstract=3458946

H. Kent Baker

American University - Kogod School of Business ( email )

4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
202-885-1949 (Phone)
202-885-1992 (Fax)

Greg Filbeck

Pennsylvania State University ( email )

286 Burke
Erie, PA 16563
United States

Victor Ricciardi (Contact Author)

Washington and Lee University ( email )

204 W Washington St
Lexington, VA 24450
United States

Social Science Research Network (SSRN) ( email )

Middle Island, NY 11953
United States

HOME PAGE: http://www.amazon.com/Investor-Behavior-Psychology-Financial-Investing/dp/1118492986

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