Findings Highlight Importance of Goals-Based
Wealth Management Approach for
Advisors and
Investors
TORONTO, Nov. 1, 2023
/CNW/ -- SEI® (NASDAQ:SEIC) today announced the
findings of its inaugural Behavioural Coaching Survey, which
revealed that both advisors and investors can be affected by
behavioural biases. The study examined insights from advisors in
Canada about their personal biases
and those they observe with clients, highlighting similarities and
differences that could impact financial outcomes.
Anne Hoare, Head of Asset
Management Solutions, SEI Canada, said:
"In today's environment, investors increasingly expect a
collaborative and personalized experience with their financial
advisor to meet their long-term goals. With emotions running high
during market volatility, biases are more likely to show up in
advisor-client interactions.
"Rather than avoid this emotional terrain, advisors can create
space for discussions about the existence of biases and their
potential impact on clients' financial health. Talking about these
areas can put the advisor in a position to coach clients away from
acting on biases and toward better outcomes."
SEI's research found that advisors and their clients tend to
share common unconscious beliefs, including:
- Loss aversion: Recognized as a stronger sensitivity to
losses than gains, this can lead advisors to recommend investments
that are not appropriate for a client's risk profile, limiting
growth opportunities for themselves and their clients. Thirty-four
percent of advisors recognized this bias among themselves, while
62% suggested this is the most prevalent bias they see in
clients.
- Recency: Defined as a mentality in which investment
decisions are made based on recent market events, this has the
potential to lead advisors and clients to select misguided
investments or avoid investments that align with long-term goals.
Twenty-one percent of respondents viewed this as one of their most
common biases, while 50% indicated that this is the second most
frequent bias observed with clients.
- Familiarity: Known as a predisposition to invest in
assets that are familiar, this bias can result in an
under-diversified portfolio that can limit clients from achieving
their goals. Sixty-two percent of advisors reported familiarity
bias within themselves, while 25% cited this as a common bias among
investors.
The survey also revealed that while some advisors are utilizing
a goals-based wealth management approach, there is an opportunity
to increase client-centric practices across the industry. When
asked how advisors align client portfolio(s) with individual goals,
only 33% reported that every goal has its own portfolio to match
their risk levels and time horizons. Additionally, 59% of advisors
noted that they have created financial plans for more than half of
their clients, while 41% have not. Advisors who embrace a
goals-based approach can help investors reach their goals, develop
deeper relationships, and increase client retention.
Methodology
The survey results incorporated 169
responses from SEI's Behavioural Coaching Survey, conducted in
May 2023.
About SEI Canada
Founded in 1983, SEI's Canadian
business offers integrated investment management and strategic
advice solutions to help institutional investors and intermediaries
achieve their organizational goals and fulfill fiduciary
responsibilities. SEI's investment approach provides multi-manager,
globally diversified strategies with an appropriate home-country
bias for Canadian retail investors. SEI's goals-based strategies,
strategic asset allocation strategies, and asset class funds are
available through select dealer relationships. For more
information, visit seic.com/en-CA.
About SEI®
SEI (NASDAQ:SEIC) delivers
technology and investment solutions that connect the financial
services industry. With capabilities across investment processing,
operations, and asset management, SEI works with corporations,
financial institutions and professionals, and ultra-high-net-worth
families to help drive growth, make confident decisions, and
protect futures. As of Sept. 30,
2023, SEI manages, advises, or administers approximately USD
$1.3 trillion in assets. For more
information, visit seic.com.
Company
Contact:
|
Media Contact:
|
Emily
Baldwin
|
Corey
Goldman
|
SEI
|
Vested
|
+1
610-676-3262
|
+1
416-322-2863
|
ebaldwin@seic.com
|
cgoldman@fullvested.com
|
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SOURCE SEI Investments Company