Russell Investments and Fidelity both see disconnect between HNW investors and RIAs in separate studies
Mere millionaires prefer fixed income and ultra-wealthy Tiger 21 members also edge toward perceived sleep-at-night investments
Elmer Rich III
This is a huge, growing problem and threat to advisors — clients engaging in self-harming investment behavior. Brain science and the advanced social sciences have PROVEN that our instincts, reactions and emotions are unerringly bad guides to long-term investing and protecting our own assets. The same is true for professionals as well.
All professionals, including attorneys, accounts and doctors now face this same critical problem: – The client (patient) does not follow the best professional advice – The client insists, often, on doing the opposite recommended by the professional (as this article points out) – Based only on some current emotional moods — mainly fear – However, when and if bad results happen, the advisor is blamed and sometimes sued
So the advisor ends up in legal jeopardy because of client’s “irrational,” usually fear-driven, behaviors. As clients age both their susceptibility to these mistakes and self-harming investment behaviors and the consequences get worse.
In fact, there are ways to address these behaviors and the psychology driving them. We can learn from other professions. We post on this topic regularly. As marketers, we have studied this problem for years and are experts in the topic. It complicated but remedial action can be taken by advisors. Here are some recent posts on the topic:
“Can One Bad Investment Experience Cause Lifetime PTSD and Scaring? Sometimes” —http://wp.me/p167Bf-9P
“Why Smart People Defend Bad Ideas” — http://wp.me/pXvvI-ac
Joanna Rotenberg is departing Fidelity Investments after only two years, writing that she traveled 20,000 miles and successfully split her retail division into wealth and brokerage units
At her hire, analysts were adamant the head of Fidelity retail had 'big shoes to fill' to replace legendary Kathleen Murphy and her task of 'digitiizing' retail was no small ask
December 16, 2023 at 2:22 AM
Biz Briefs: The sorry scene at my local First Republic branch • Schwab launches new (smaller) lay-off round • Schwab hoovers pennies passing FINRA fee to clients • Gensler pleas for funds • Fidelity owner's private equity pres. retires • an Orion-Envestnet staff switcheroo • LPL dumps FutureAdvisor
Range Rovers screeched in and drivers joined a grim queue to get their cash, and cookie • The Schwab-TDA deal cull count now stands at roughly 3.5% of its staff • FMR's hockey star president has stepped down • SEC chief wants more enforcers • An Envestnet executive proves joining a rival is good business • LPL now has an in-house robot.
April 29, 2023 at 1:36 AM
Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees
The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors
February 17, 2023 at 2:49 AM
Vanguard Group shows up as 'alpha' disciple with two new fixed-income fund launches as it surpasses PIMCO's $2 trillion with ex-Goldman Sachs partner now calling the shots
The $8 trillion Malvern, Pa. manager owns beta investing, but RIAs are demanding higher income -- hence market timing and cherry picking -- from their fixed-income allocation.
August 10, 2021 at 11:46 PM
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