FFB Practical Tips, Part 3: Rules are often more valuable than products
It sounds paradoxical, but it proves true time and again: financial advisers are more successful when they talk less about products and more about investment principles and rules during client meetings. Why? Behavioural finance provides the answer.
In the FFB Practical Tips series, Nikolas Kreuz offers valuable advice on how you can use behavioural economics to respond to typical, often emotional client behaviour.
In Part 1 of this series, you were already introduced to the basics of behavioural economics and learnt how neurobiological patterns influence investment decisions. In Part 2, you read about how to respond constructively to typical client objections.
Here, in the third and final part of the series, we look at the hidden obstacles to returns in your investment portfolio: excessive costs caused by impulsive trading, a lack of portfolio monitoring and a sub-optimal investment structure.
