If there's one common refrain from financial advisers about the field of finology, it's that the research and concepts are fascinating, but it's hard to know exactly how to apply them in the financial advice process. There are so many finology concepts, how does an adviser sort the most important ones to focus on? What can advisers do to ensure their own unconscious beliefs and biases don't undermine the client relationship and investment outcomes? What specific actions can advisers take to systematically apply finology insights to improve the advice experience and outcomes for clients? This workshop will focus on insights from the inaugural Finology Benchmarking Indices (FBI) and facilitate self-reflection and scenario-based exercises to help you form a personalised action plan to embed finology concepts into your practice.

Giving Voice to Values (GVV) is an innovative approach to values-driven leadership development in business education and the workplace. GVV is not about persuading people to be more ethical. Rather, it starts from the premise that most of us already want to act on our values, but that we also want to feel that we have a reasonable chance of doing so effectively and successfully. To raise those odds, rather than a focus on ethical analysis, GVV focuses on ethical implementation and asks: "What if I were going to act on my values? What would I say and do? How could I be most effective?"

Since the 1980s, the efficient markets hypothesis has come under attack. Market anomalies were initially attributed to the actions of noise traders, who were believed to hold irrational beliefs and standard preferences. There was an expectation that such actors would lose their wealth over the long run via arbitrage, albeit that the effectiveness of arbitrageurs was restricted by various risks and costs. In the 1990s, psychologists identified additional limits to arbitrage which are tied to human nature. This workshop will explore these additional limits, namely: bounded rationality; the need for well-being; and, self-control problems.

Working with clients takes more than just modelling financial outcomes. Better results are gained when investment advisers really understand their clients and truly connect with them. This workshop provides training in key counselling techniques and skills such as: reflective listening; managing resistance; and, empathic responding. You will learn how to apply counselling skills, incorporating a range of typical examples (e.g. dealing with grief, managing redundancy and planning for retirement), how to manage resistance and motivate clients using counselling skills and professional ethics during the interviewing process.

Some of our Faculty return to discuss their key takeouts from Finology Summit 2020, to help delegates think through how their own and other people's different investing biases, beliefs and behaviours impact investment markets and portfolio construction practices – and therefore, investment outcomes.

Over shorter periods of time, there are market inefficiencies due to well researched behavioural biases including anchoring & confirmation bias. Knowledge of these biases can help improve our own decision making and the decision making of our clients. To manage the risks and exploit the opportunities that behavioural biases create, practitioners need a disciplined and systematic framework to objectively assesses the current market environment and challenge the assumptions that underpin market views. This is necessary to improve portfolio construction outcomes.

Practitioners should seek to understand how their own and other people’s different biases, beliefs and behaviours impact investment markets and portfolio construction practices. In order to truly “know themselves”, practitioners must understand their own cognitive biases which influence their own investing behaviours. By identifying their own systematic patterns of departure from “rational” behaviour, practitioners can compensate for their effects, and improve the quality of their day-to-day decision-making.

Behaviour biases determine that performance drives managed fund flows. Armed with a vast database of client transactions, we can derive far deeper insights. By building a regression model to predict client behaviour, we are able to confirm that engagement is critical. While this is intuitive, the data ascribes a value to engagement, and also highlights the positive benefits of an investment adviser on the behaviour of investors. Advisers generally have more datapoints per client than fund managers but smaller client bases. With the right mindset and approach to collecting and analysing data, investment advisers can truly get to know their clients, optimise their efforts and better understand their investment advice value proposition.

Behavioural biases get in the way of good investment decision-making. A well structured approach to goals based planning can go a long way to defeating the worst impacts of many of these biases. Creating a goals based plan can help frame the risks in such a way as to manage loss aversion, it can turn mental accounting and regret avoidance from weaknesses to strengths. Along the journey it can help mitigate against the alternating terrors of overconfidence and recency bias which drive investors to become excessively optimistic and then pessimistic in response to market ups and downs. But not all goals based plans are created equal. The best will share certain characteristics that help drive optimal results.

The ability for investment practitioners to entertain the prospect of outcomes (risk) significantly different to those currently visible is a perennial challenge. To mitigate the multitude of behavioural biases working against the ability to envisage what could go wrong, a scenarios approach to mapping future uncertainty is useful. Scenarios design imposes a discipline on the practitioner to dispassionately consider a comprehensive range of potential futures. It provides a valuable tool for preserving robust decision making during times of high market consensus where unwelcome cognitive biases are unknowingly invited to influence decision making. A scenarios approach also forces the uncomfortable undertaking of anticipating outcomes to which history provides little guidance. As we scramble to make sense of occurrences such as the corona virus and climate change, the application of prior cultivated imagination can preserve the integrity of investment decision making by protecting us from ourselves.

It’s a natural human instinct to prioritise immediate needs over longer dated requirements. We humans set targets to keep on track, a benchmark by which to measure our progress. However, the trade-off for the better alignment is that targets anchor people to a fixed objective and a fixed corresponding time frame. The immediacy of a client’s income needs creates numerous challenges for investment manager – not least that a fixed point of reference, in the context of the investment risks and uncertainties, can induce biases in approaches to meet client objectives. These biases will be costly to investors in the long term.

The development of robust and sustainable investment approaches is a complex and intricate art. Increased scrutiny, transparency and options for investing means that we need to reconsider our role in the delivery of client outcomes. Constant change within the wealth management and financial advice sectors means that demand for approaches that are simple and efficient continues to grow. Portfolio design that enhances the communication and advice processes will add value beyond “fees and returns” and offer investment advisers an elegantly simple approach to serving their clients. Embracing transparency, and communication through the language of client values and behaviour will help build a foundation of trust, and assist investment advisers create value through architecting a portfolio that is “in sync” with their client’s lives and values. Doing this well means that we need to understand the natural biases that exist within the industry and our existing approaches, and the conflicts they create with serving our clients efficiently. Through recognising and accepting some level of client irrationality, it is possible to create improved outcomes for everyone.

The media has come under increasing criticism in recent times for the role it plays in shaping our opinions and behaviour. New research investigates whether the choice of words used in the news and social media is important in shaping the investment behaviour of individuals, so impacting on pricing within markets. It finds that media sources generate emotions that transmit to individuals and so influence their investment decisions. It is not apparent whether this is a good or bad thing but what is certain is that it results in a departure from so-called efficient markets. It also gives rise to the possibility of developing investment strategies to exploit mispricing related to these media-induced emotions.

Most industries have faced significant disruption from the advent of big data, machine learning and artificial intelligence - in most cases for the better. The increased use of data and artificial intelligence could overtake the capacity of human decision making or it could instead be used to empower individuals, particularly in the area of behavioural psychology. Used responsibly, artificial intelligence can help us make wiser decisions as investors and capital allocators and help us work towards a more sustainable and inclusive future. Machines are here to stay. Through the right technology, and with the right interface, we can empower ourselves as never before.

Traditional finance theory suggests that the pursuit of profit is as universal as gravity. Yet the values of society change over generations and with that the goals and dreams of what people value and care about. Finance can no longer be considered in isolation, and must be looked at within the context of a country’s culture - something that shapes our clients’ biases, beliefs and behaviours, as well as our own. By refocusing their sustainable investing efforts from fund managers and onto client values and beliefs, practitioners will start a chain reaction which delivers sustainable outcomes for their clients and long-lasting relationships.

Most of us want to act on our values, but we also need to feel that we have a reasonable chance of doing so effectively and successfully. Drawing on lived experience of business practitioners and recent research, Giving Voice to Values (GVV) fills a critical gap in our understanding of how to enable ethical practice. Rather than focus on ethical analysis, GVV focuses on ethical implementation and asks “What if I were going to act on my values? What would I say and do? How could I be most effective?” GVV has been piloted in over 1,170 educational and executive settings and holds the promise to equip business leaders to not only know what is right - but how to make it happen.

Finology is an interesting and unique mix of behavioural finance (“fin”) and investor psychology (“ology”) as it relates to giving investment advice to individual investors. Finology is where investing meets investors™. The finology discipline focuses on identifying investing biases, beliefs and behaviours and the investment outcomes. To achieve this, finology connects behavioural finance and investor psychology - encompassing "know the markets", "know yourself" and "know your clients". Finology knowledge and skills help us better identify and understand how our own and other people's different investing biases, beliefs and behaviours impact investment markets and portfolio construction practices - and therefore, investment outcomes - to enable better quality investor portfolios.

Established in 2016, Finology Summit is THE behavioural finance ("fin") and investment psychology ("ology") program of the year. The 1.5-day, face-to-face and online learning program is designed and curated by our specialist, experienced and independent team and features an exceptional Faculty of experts from around the world. Each offers his/her best high conviction ideas on behavioural finance and/or investor psychology, and the investment implications.

Portfolio Construction Forum Finology Summit is THE behavioural finance ("fin") and investment psychology ("ology") program of the year. It will help you better identify and understand how your own and other people's different investing biases, beliefs and behaviours impact investment markets and portfolio construction practices - and therefore, investment outcomes - to help you build better quality investor portfolios.

Classical economists often incorporated human behaviour into their thinking. But in the 1960s and 1970s, homo economicus - the great rational agent of economic theory - was born. It was not until the 1990s that the link between human behaviour and economics began to be re-established.

Financial decisions are among the most important life-shaping decisions we make. Two recent research papers provide further evidence as to how practitioners can help improve clients' financial decisions.

Ron Bird | 1.00 CE

Portfolio Construction Forum Strategies Conference facilitates debate on portfolio construction strategies. It will challenge and refresh your portfolio construction thinking by debating contemporary and emerging portfolio construction strategies, to consider applying in practice to build better quality portfolios.

Finology Benchmarking Indices will help you benchmark your investing biases, beliefs and behaviours vs peers, to further empower your client care and practice knowledge and skills.