A new cottage industry has emerged in the financial world called “behavioral finance theory” (BFT). The foundation of BFT is that people often make decisions that rational economic theory fails to predict. In other words, there is something about human nature that drives us to make different choices around money and finances that a formula or financial plan might otherwise suggest we do.
Laurie Santos*, Director of Yale University’s Comparative Cognition Laboratory and Associate Professor at Yale University, and her colleagues conducted very interesting research regarding this subject. It involved a series of experiments involving capuchin monkeys (a good proxy for human behavior) that explored a handful of key behaviors as they related to behavioral finance theory. Read more
Over the past few years, I’ve heard the joke that ends with this punch line: “Yesterday you were a prospect, today you’re a client!” It resonates in the sales world because of the feeling some clients have once they sign on the dotted line.
It’s a feeling of under appreciation and loss. Why? Because before a client has signed, they’re courted as prospects – receiving high touch, responsive and on demand service.
But, once the sales experience is over, the prospect becomes a client and gets handed off to a different set of people and processes. And sometimes, all of the sudden, the courtship is over! The end of the attentive service is significant, because as I’ve said before: your clients are your competitor’s best prospects, and the end of this courtship experience is exactly what I’m talking about.
The good news is that moving out of the courtship stage doesn’t have to be a letdown. In fact, there are plenty of great retirement plan teams that haven’t lost a client. Why? Read more
As thousands of boomers a day flood into retirement, many experts are beginning to feel that the financial tools and strategies Americans need for living in retirement may not be the same exact tools and strategies that we need to save for retirement. Retirees need tools and strategies specifically designed to help them transition from a life fueled by an employer-provided paycheck to a life supported by a paycheck from themselves — a mycheck. That’s a pretty big deal, and it is often underestimated by many retirees.