Sonja Steyn, Strategic Head of Wealth Management and Financial Planning & Advice at Momentum
Many individuals often attribute their financial circumstances to their budgets and external factors, overlooking the profound impact of their own behaviour. Ultimately, we cannot escape ourselves; our actions and decisions play a significant role in shaping our financial realities. This realisation is driving an increasing number of clients to explore behaviourally informed financial advice, enabling them to build and protect their financial dreams with greater precision and personal insight. Emotions and experiences play a fundamental role in shaping our decisions, especially when it comes to wealth creation. Financial success cannot only be measured by numbers; rather, it requires a deep understanding of the complexities of human behaviour that informs sound financial choices.
For those of us in the advice industry, this transition to behaviourally informed advice indicates not merely a change but an exciting evolution that prioritises the human experience at the heart of financial planning and advice.
Unlocking financial success with behavioural insights
Financial dreams are shaped by a combination of personal aspirations, past experiences, and deeply rooted beliefs. As advisers, we understand that the journey to financial success begins with a comprehensive understanding of all of these influences.
By choosing the right financial adviser, clients can gain valuable insights into the psychological factors that drive their financial decisions, while receiving expert guidance from a professional who can help them navigate their choices effectively.
Behaviourally informed financial advice aims to uncover these subconscious money beliefs that influence all financial choices. By addressing these underlying issues, advisers enable clients to align their financial strategies with their core values and long-term financial objectives, ultimately fostering a more fulfilling financial journey.
The role of behavioural coaching
In today’s financial landscape, many financial advisers fulfil not only the role of a financial advice expert, but they also act as behavioural coaches, helping clients navigate the emotional complexities of being human.
They understand that even the most carefully designed financial plans can be derailed by emotional reactions to market fluctuations or life changes. By using principles of behavioural finance, advisers assist clients in maintaining a long-term perspective, shielding them from impulsive decisions that could risk their financial dreams.
Periods of market volatility, fear and uncertainty can drive clients to make quick decisions, such as selling investments at a loss. Behavioural coaching equips clients with the knowledge and skills to stay the course, minimising the “behavioural tax” associated with emotional decision-making and ensuring they remain focused on their long-term objectives.
The power of personalised advice
Effective financial planning goes beyond the sale of product solutions; it is fundamentally about understanding and supporting clients on their unique financial journeys. Advisers invest time in understanding each client’s individual circumstances, values, and aspirations, allowing them to create personalised strategies that address specific needs.
Building and protecting your financial dreams
As we raise awareness about World Financial Planning Day, let us embrace the transformative potential of behaviourally informed advice in turning dreams into reality. For advisers, the mission is crystal clear: to build and protect the dreams of our clients. This mission extends beyond what we know about financial products and services; it is about creating a solid foundation for the life clients envision. By integrating behavioural insights into the advisory process, we enable clients to make decisions that align with their life goals. Our commitment to understanding the individuals behind the numbers ensures that financial strategies not only adapt to changing circumstances but also pave the way for enduring success.
Together, we are redefining financial advice, placing personalised guidance at the forefront of every interaction, and truly supporting our clients on their journey to achieving lasting financial prosperity.
ENDS
