The main task of a financial advisor is to assist an investor to achieve their financial goals through asset allocation, portfolio management and market analysis. But more than often the traditional investment and financial management advice falls short to impress or encourage the investors to make a fruitful investment. The main reason for such failuresis partial and half-baked outlook towards investment; investors are often guided by their own set of bias and confusions. This is why it becomes crucial for advisors to play a behavioural role often to help investors make effective and bias-free investment decisions.
Behavioural financial advice doesn’t try to replace the traditional form of financial planning; in fact, it aims at utilising both traditional investment advice and behavioural components to motivate themselves to offer bias-free and objective investment advice that will guide investors towards making better investment decisions. Typically, behavioural financial advice comprises of four components, namely, traditional finance, economics, psychology and behavioural patterns. An amalgamation of these components is utilised by the financial advisors to encourage investors to seek the opportunities that are best for them in terms of sustainable returns and risk factor.
Role of Behavioural Finance Advisor
With further analysis, one can safely say that the job description for financial management is evolving with time and will continue to do so in future as well; since investors’ behaviour is so crucial for investments one might as well ask about the behavioural role advisors often play.Besides having a good reputation and the expertise to help maximize returns, the behavioural financial role of an advisor includes a variety of tasks and the following are some of the many roles they play:
- To help clients to be in control of their emotions
- To be approachable and easy to talk to
- To help clients reach their financial goals
- To be responsible and in sync with the client’s portfolio while making market-oriented suggestions
- To be transparent about their fee structure and charging pattern
- To have a keen sense of understanding of both the market and the client’s need
- To be updated about the latest technology, investment trends and theories
- To offer selfless and unbiased financial solutions and advice
- To communicate with the client in a transparent and easy to understand manner
- To keep the client in the loop with the market and its movement that may seem like a good opportunity for them
- To keep the client on the right track in order to help them reach their financial goal
An investor’s savings, behaviour and investment decisions tend to have a deep effect on their finances. An effective combination of traditional investment advice and behavioural financial advice is the need of the hour to make a focused and objective decision towards investment. Make your investment decisions free of bias and emotional blur by availing the best financial advice from our behavioural financial advisors and focus your entire energy towards maximising your returns.Follow Us: