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As behavioral finance has moved into the mainstream and started taking financial services by storm, one thing has become clear.
It’s great to know there’s a way to explain a client’s sub-optimal behavior.
But, it’s an entirely different challenge to know what to do about it.
In other words, behavioral finance has done a great job of providing advisors with a list of diagnoses.
There are over 20+ biases to pick from.
But, we need less diagnosis and more prescription.
More help in knowing what to do when working with clients to help them overcome and minimize their biases on the path to better financial behavior.
Is it helpful to know that the 60-year old pre-retiree is holding onto a highly-concentrated stock position because of overconfidence bias?
But, it’s even better to know what to do about it.
Barry Ritholtz has been on the cutting edge of behavioral finance in the industry AND he just so happens to run an advisory firm where they focus on applying behavioral finance principles to improve client behavior, and ultimately, client outcomes.
In this episode, he peels back the curtain to share the specific ways that Ritholtz Wealth Management focuses on improving client behavior.
Things You’ll Learn
- The book that completely reshaped the way Barry viewed behavior and money
- Why they steer clear of market forecasts and focus instead on probabilities
- How the firm gets their clients focused more on the process and less on the markets
- A question to ask your clients who believe everything they hear on TV from market pundits
- The power of setting expectations in the midst of uncertainty (and how to do it effectively)
- How the firm uses its newsletter to improve financial behavior
- How they minimize bias by naming their portfolios
- The “Milestone Rewards” program that offers a fee discount to reward client behavior
About Barry Ritholtz
Barry Ritholtz is the co-founder, chairman and CEO of Ritholtz Wealth Management, the 4th fastest growing RIA in America. His blog, The Big Picture, gets over 500k page views per month and has been named one of the top blogs in finance by the New York Times.
He’s also the creator and host of Masters In Business, the most popular podcast on Bloomberg radio, where he interviews experts in business, finance, and behavioral finance.
At this point, his name has become synonymous within financial services as a behavioral finance guru.
Other Episodes You’ll Like On Applying Behavioral Finance:
- Bringing Behavior To Life In Financial Planning with Neil Bage
- The Path To Building A “Behavioralized” Practice with Daniel Crosby
- Applying Behavioral Finance Principles To Coach Clients And Differentiate Your Business with Jay Mooreland
Whenever you’re ready, there are 3 ways I can help you master the human side of advice:
- HSOA Masterclass: An 8-week group program on building trust & connection, aligning money and life, and delivering frictionless advice.
- The Ultimate Discovery Meeting: A proven framework to seamlessly convert prospects into life-long clients in one meeting.
- HSOA Community (COMING SOON!): An online space to meet, collaborate, discuss, brainstorm, learn and grow with other advisors passionate about the human side of advice
If you want more information on any of these, let me know here.