Loss aversion is an emotional bias. Basic behavioral coaching strategies are ineffective with emotional biases. For instance, it would be unwise to tell someone, “Don’t feel that way.”
Dealing with emotional biases requires us to validate their feelings while pivoting their focus to more productive and profitable decisions. This is not easy.
A few weeks ago I invited a select group of Behavioral Finance Network advisors to mastermind on the upcoming election and things we need to do today to help our clients weather the emotional storm ahead.
On the 45 minute call I had three advisors join via Zoom and two others call in. It was a great call with several ideas that helped me create a behavioral/election tool for advisors to use with the clients, to proactively filter and manage what’s about to come at them.
Below is a three-minute clip of our call where I explain how to use loss aversion to our benefit in helping clients remain rational.