Oxford Risk

Oxford Risk's Head of Behavioural Finance, Greg Davies joins an expert panel assembled by The Wisdom Council that will explore the complexities around client financial vulnerability. Register for the webinar on Tuesday 20th August here now - https://lnkd.in/eqwqZCgX #BehaviouralFinance #BeFi #WealthManagement #FinancialPlanning #FinancialAdvice #FinancialVulnerability

#ScienceofSuitability #31: DON'T ask about return expectations when assessing Risk Tolerance Asking an investor what return they expect to experience from an investment creates an unnecessary (and likely unreasonable) expectation where none may have existed before. Expected returns has nothing to do with an investor's willingness to take risk. Such questions should be absolutely avoided as part of any assessment of Risk Tolerance. Return expectations are better 'owned' by the adviser, and brought up after an accurate and robust assessment of Risk Tolerance has been conducted. Find out more about gaining the deepest and most comprehensive insight on your investors with Oxford Risk's Investor Compass Risk Suitability Solution - https://lnkd.in/ecqdE4qC #behaviouralfinance #risksuitability #financialadvice #risktolerance #investments #wealthmanagement

📰 Read how Oxford Risk is partnering with Bancolombia to implement Behavioural Engagement Technology to drive better financial outcomes for their customers and investors - https://lnkd.in/e3zRp9X3 #BehaviouralFinance #BeFi #FinancialPlanning #FinancialAdvice #WealthManagement

Behavioural Alpha - The cost of investing badly Investors are also prone to forgo returns on the money they do invest. Investors exhibit a common tendency to take more risk when times are good, and reduce risk when markets drop. This ‘behaviour gap’ – between the theoretical return investors would have achieved in a behavioural vacuum, and the one they do achieve in real life – results in investors buying high and selling low, and thus systematically underperforming buy and hold returns. Of particular concern here is the danger of panic selling in times of market turmoil. For example, the large market dip at the onset of COVID in March 2020 was immensely costly to many investors. There are many industry and academic studies of the behaviour gap, covering many geographies, time periods, market conditions, and asset classes. Collectively, they suggest the cost to the average investor is 1.5-2%. This makes up the bulk of the behaving badly cost. To find out more, download our Behavioural Engagement Technology whitepaper and follow us on LinkedIn for more great content - https://lnkd.in/eCyi4KKY #BehaviouralFinance #BeFi #FinancialPlanning #FinancialAdvice #WealthManagement

📽️ Watch as Head of Behavioural Finance, Greg Davies discusses insights from Oxford Risk's whitepaper, 'Guaranteed Income and Investment Risk: How much of each?' with Just Group plc - https://lnkd.in/e7aVXZnN #BehaviouralFinance #BeFi #RetirementPlanning #FinancialPlanning #FinancialAdvice #WealthManagement

#ScienceofSuitability #16: DON'T confuse hypothetical choices with optimal actions Asking investors to choose between hypothetical gambles, lotteries, or portfolios from a limited menu may not reflect investors' real preferences. Hypothetical trade-off questions have been proven to result in unstable outcomes that cannot meaningfully measure Risk Tolerance. In an Oxford Risk survey of more than 400 respondents, an overwhelming 57% agreed that a good way to measure Risk Tolerance is to offer choices between low or high-risk example investment portfolios. Measuring Risk Tolerance should be about assessing an investor's long-term willingness to trade-off risk against return. Find out how measuring Risk Tolerance badly could actually be as bad as not measuring it at all in our blog here - https://lnkd.in/eDJ9GA6d #BehaviouralFinance #BeFi #FinancialPlanning #FinancialAdvice #WealthManagement

How can behavioural finance help firms respond to the FCA’s Thematic Review of Retirement Income Advice? Read our latest blog to find out - https://lnkd.in/d_2P9kmH #BehaviouralFinance #BeFi #WealthManagement #FinancialPlanning #FinancialAdvice

Oxford Risk and Impact Cubed analysis highlights significant SDG gap in the market. Discover more about this and our new partnership here - https://lnkd.in/eUBx4REp #SDG #FinancialPlanning #FinancialAdvice #SustainableInvestment #SustainableInvesting #BehaviouralFinance #WealthManagement #BeFi

Behavioural Alpha - The cost of failing to invest The first major investing mistake is leaving too much cash on the sidelines. People sit on mountains of cash not because it is secure, but because it feels secure. This feeling comes at a high cost. Failing to invest provides short-term emotional comfort in a very simple way – you cannot lose if you don’t get involved – but at a very high price. An investor with moderate Risk Tolerance in a globally diverse multi-asset-class ‘optimal’ portfolio, can expect excess returns over cash of around 4-5% per year averaged over the long term. Seen this way, ‘sleeping well at night’ because of all the cash under the bed could become somebody's single biggest expense each and every year. To find out more, download our Behavioural Engagement Technology whitepaper and follow us on LinkedIn for more great content - https://lnkd.in/eXNNJV5H #BehaviouralFinance #BeFi #FinancialPlanning #FinancialAdvice #WealthManagement

Behavioural Alpha what is it: Helping investors capture this lost 3% of behavioural alpha per year allows advisers to: • justify fees; • increase AUM immediately (through investors being more comfortable putting more wealth to work); • increase AUM over time (as investors forge closer, and more stable, emotional connections with their portfolios); and • increase investor loyalty and referrals, and reduce investor attrition (through deeper connections between institution and investor). • Help investors achieve good outcomes and be truly successful! To find out more, download our Behavioural Engagement Technology whitepaper and follow us on LinkedIn for more great content - https://lnkd.in/eYcQNn6R #BehaviouralFinance #BeFi #WealthManagement #FinancialPlanning #FinancialAdvice