If you are a Financial Adviser, perhaps the following scenario resonates with you.
- You are a Financial Adviser in the process of making a financial recommendation to your client regarding a new investment.
- You have had your initial meeting, fact finding meetings and are ready to make your recommendation.
- However, your client (who had specifically asked you to recommend a suitable investment vehicle for some surplus cash) is suddenly hesitant about your recommendation.
Why?
This may be down to Recency Bias at play.
Essentially, Recency Bias can cause someone to put too much emphasis on experiences that are freshest in their memory (even if they are not the most reliable or relevant).
Your client may have had great results from previous investment advice you’ve given them. However, if they are more vulnerable than average to this particular bias, having a recent experience as simple as hearing news reports of market instability or being told by a friend or relative about an investment which went sour, may make your client hesitant to make any positive decision about their finances.
This is a common situation and one that can be difficult to navigate.
However, Wi Ai Technology can demonstrate an effective tool to help you deal with this. By offering your clients the ability to test themselves for a range of biases (including Recency Bias) using our bias profiling software, you give your client the ability identify any biases at play. You and your client get a helpful personalised “Investment Personality Profile Report”. This will help both you and your client gain a vital understanding into their thinking, enabling them to place appropriate trust in your advice process and making them more likely to make the right financial decision for them.
Is this a scenario you have come across when working with clients?
