How Behavioral Finance Helped Advisors in 2020

As I speak at major conferences on the application of behavioral finance I often hear advisors say, “I wish I had known this. Where were you last year?” To which I respond, “I was right here providing behavioral content, coaching and tools to your peers.”

In this post, I highlight several pieces of content that advisors used to navigate their clients and help them not only make good decisions, but remain calm during the heights of the pandemic fear.

My guess is that the current environment is just a lull; at some point fear will come back. We are still far from getting out of this. There is a lot of hope, but without progress, could turn into despair – which is not a favorable emotion for investors. This sampling is less than half of what I produced and provided for advisors to guide them through the first six months of the year.

As you will see from the dates, most of this content was proactive. Meaning we addressed the issue before it became an issue. Anticipating and acting are imperative to help your clients filter the junk and remain focused. Behavioral Coaching is much easier and more effective to do proactively than reactively.

January

  • 1st – “A Reliable Forecast for 2020”. A fun forecast based on investor behavior. Two timely points made: the investor will be surprised and tempted to abandon their plan
  • 28th – “Coronavirus: A Healthy Perspective”. Ghostwritten article highlighted what was a recent headline in the media. Cautioned investors that if it worsens, the market could sell off.

February

  • 3rd – “Responding to Coronavirus Concerns”. A coaching message with talking points on how to have an effective discussion with clients about the Coronavirus (to follow up with article sent out the previous week)
  • 24th – “The Coronavirus Has Legs”. Another coaching message telling advisors this thing could become something big and we could see the market start to price in an economic slowdown. Client talking points provided.

March

  • 2nd – “Investing: Simple, Yet Difficult”. Ghostwritten article highlighting how difficult investing can be with volatility. Highlighted JP Morgan research that many of the market’s best days comes within weeks of its worst days.
  • 4th – “Having a Consistent Message for YoYo Markets”. Coaching message on creating simple and consistent advice to use during volatility with ideas on what to say to calm investors.
  • 9th – “Send This To Your Clients”. An email written for advisors to send to clients acknowledging the losses, stating that losses may get worse and reinforcing a few important perceptions.
  • 17th – “Fear, Perspective & Opportunity”. Ghostwritten article putting fear into perspective and how to mentally prepare oneself to take advantage of the opportunities.
  • 23rd – “Volatility & Fear – Your Chance to Grow”. Coaching message on what BFN advisors can do to take advantage of the situation to demonstrate to clients and prospects that they are different and superior to their competition.

April

  • 1st – “Preserving Your Mental Health”. Ghostwritten article with tips to find peace and stay sane in our new locked down society (I received very strong feedback from advisors – their clients loved this.).
  • 6th – “Strategic Ignorance”. Ghost-produced video (and article) extolling the virtue of ignoring certain information (i.e. market movements).
  • 13th – “Staying Productive”. A coaching message about how advisors, in this new world, can stay productive – how, when and what talking points when reaching out to clients and prospects.

May

  • 1st – “The Virtue of Optimism”. Ghostwritten article on how to stay optimistic when it feels like life is crashing down on us. (Can you see how this is more impactful and valuable than sending a market forecast?)
  • 5th – “Shock, Awe & Perspective”. Ghost-produced video (and article) highlighting the unprecedented shock we just went through and some productive perspectives to maintain going forward.
  • 13th – “Send This Email to Clients”. Acknowledging we don’t know where things will go from here and providing three things our clients should do now to prepare for whatever may come.

June

  • 1st – “Wolf in Sheep’s Clothing”. Ghostwritten article highlighting two recent investments that claimed they would benefit from greater volatility actually blow up when we had greater volatility.
  • 22nd – “What Will Be So Obvious in Hindsight 12 Months From Now?”. Coaching message on what we should be discussing now with clients of all that could happen and what our plan is. (NOTE: this is a present focus. I help advisors develop their message through individual coaching calls. It is about proactively getting in front of what could be next).
  • 25th – “Market Whiplash”. Ghost-produced video (and article) highlighting the fact that we have experienced a V shape market recovery and why its so important to ignore price moves and remain disciplined to plan.
 
 

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