As our industry heads down the goals based path and increasingly uses data and analytics to deliver real-time insights to investors, it’s important to remain focused on the goal at hand. As we’ve seen with fitness trackers, if the analytics are too myopic, we might get undesirable results because we’re not focusing on the right things. According to Ariely, units of measurement and our reporting must be compatible with our behaviors. We need to figure out the right range and scope of measurement so that our activity is measured in the right way.
Putting the Client First: Goals-Based Wealth Management
The shift towards goals-based wealth management puts the client first and relegates products to the role they deserve: as vehicles used to deliver investors’ desired results. An outcome-oriented focus ultimately helps investors focus on their own needs. But as behavioral economics points out, how we organize and deliver investment information to clients is incredibly important.
If we are going to use portfolio reporting and analytics to deliver goals-based insights, we must do it in a way that helps investors in the long term. Now, if you don’t mind, I must excuse myself for a cookie break. I’m halfway to 10,000 steps before noon!
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