Fundamental Attribution Error

Our latest financial psychology term describes how we can sometimes fall prey to errors in decision-making about others. The American Psychological Association defines fundamental attribution error this way: the tendency to overestimate the degree to which an individual’s behavior is determined by his or her abiding personal characteristics, attitudes, or beliefs and, correspondingly, to minimize the[…]

Stock Market Simulation Study: “Self-Directed” Men Win?

Article Title: Predicting Stock Market Performance: The Influence of Gender and Personality on Financial Decision Making Publication: Journal of Individual Differences (2021) Authors: Thomas Plieger, Thomas Grunhage, Eilish Duke, Martin Reuter Reviewer: Sean Bogart Examining Risk-Taking: Beyond Self-Report Studies A large amount of research assessing investor risk-taking has shown the presence of several factors that[…]

What are money attitudes?

What Are Money Attitudes?

Each of us reacts to money and money-related topics on a scale from negative to neutral to positive. Money attitudes are not perfect predictors of financial behaviors. However, how we feel about areas like budgeting, spending, and investing can and does impact our financial goals. Indeed, our attitudes can affect the entire financial planning process,[…]

What Is The Difference Between Financial Psychology and Behavioral Finance?

Financial services as an industry is moving at warp speed to embrace psychology. The trick is that we have a definition problem when describing the field that encompasses the mind, behavior, and money. If you look at the media coverage of finance and psychology, most content focuses on cognitive errors in decision-making related to investments.[…]

Uncover client personality with behavioral assessments

How to Add Assessments To Financial Planning

Individual personality traits can (and do) impact whether a client achieves financial goals. Behavioral assessments can help uncover client personality, values, attitudes, and beliefs. In turn, you can use this information to help provide the client with personalized guidance, education, coaching, or nudging to help them follow the financial plan and otherwise achieve goals. Below,[…]