Improving the Adviser-Client Relationship, Part 3

Successful investment advisers need to be world class at investing and getting their clients to act upon the investment advice they dispense. At some point, however, the efficacy of that advise is evaluated by the client. Investment advisers are probably all too aware that emotion and cognitive fail...

Full description

Saved in:
Bibliographic Details
Published in:Journal of Financial Planning 2010-07, Vol.23 (7), p.34
Main Authors: Olson, Bryan, Riepe, Mark W
Format: Article
Language:English
Subjects:
Client relationships
Consumer behavior
Financial planning
Investment advisors
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Successful investment advisers need to be world class at investing and getting their clients to act upon the investment advice they dispense. At some point, however, the efficacy of that advise is evaluated by the client. Investment advisers are probably all too aware that emotion and cognitive failures also come into play when it comes time to discuss performance. In this column the authors describe some key findings from behavioral finance that pertain to performance evaluation and provide suggestions for how advisers incorporate these findings into their practice. Advisers have a difficult job because their performance is judged after the fact and post evaluations are often clouded by hindsight bias. Here are three recommendations: 1. Convey the complexity of the task. 2. Continually reinforce investment philosophy and process. 3. Adopt broad frames when discussing performance.
ISSN:1040-3981