Why Avoid Personality “Type” Tests

A class of personality tests, known generically as “type indicators,” places clients into one of several categories based on responses to a series of questions and then provides broad descriptions of the category. Some examples of “type indicators” include the Myers-Briggs Type Indicator (MBTI) and the very popular Enneagram.  Type tests are so much fun! It’s fun to see which category you (or your clients) fall into, what other movie stars or sports figures align …
A personality test can efficiently measure a client’s money-related attitudes, values, and other characteristics. While not a perfect science, a well-developed test can accurately assess a client’s personality without some downsides of in-person interviews, which can take time and be impacted by interviewers’ biases or lack of structure.  But like any assessment, personality tests are prone to some errors. These errors could include how clients respond to a test based on wanting to look …
If you are a consumer of personal finance content like I am, you have by now undoubtedly heard one commentator or another derisively dismiss the idea of even mentioning the long-term cost of a daily Starbucks trip. They don’t want to hear about it—it’s a trope to be ignored. And this derision is coming from otherwise competent and professional personal finance sources. This phenomenon got me thinking: what’s going on here? Surely Commentator X …
Let’s Agree to Disagree Agreeableness is a personality trait that is often overlooked or misunderstood when managing our financial lives. The field of personality psychology generally recognizes five primary personality traits that are understood to form the basic foundation of individual personality (often referred to as “the Big Five” or “OCEAN model”). These include openness to experience, extroversion, conscientiousness, neuroticism, and agreeableness. Here we take a closer look at the last trait, agreeableness. We …
If you have watched a fintech product demo that includes anything remotely related to financial psychology, you might hear the word “personality” thrown around a lot. For example, I heard one very confident salesperson recently refer to his platform as measuring “investor personality” when the tech was measuring the client’s current feelings about investing. Personality characteristics predict a wide range of future outcomes regarding human behavior. The Big Five (or OCEAN) model of personality has been …

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