How has the pandemic affected them? Havethey lost a family member or a job? Has workingfrom home compounded the stress from havingmultiple generations under one roof? Withthis clarity, you have more insight for exploringfinancial questions such as: Are they scared ofsuffering short-term losses? Are they worriedthat this uncertain market may make it harderto reach long-term goals like retiring or payingfor a child’s college education?
Connecting emotionally with clients can helpyou better understand how they make financialdecisions in good times and in stressful times,and how they tend to react to uncertain marketenvironments. Those insights can help youtailor a financial plan that better fits your clients’needs and goals and help earn their trust.
Every client will react differently to market
events and life events, but the underlying
causes may be similar. Behavioral finance
focuses on common emotional and cognitive
biases that can influence our decisions around
saving, spending and investing. Behaviors such
as overconfidence and availability bias can
be driving factors in a client’s decision to sell
stocks during a downturn or chase a popular
investment trend. These biases also can emerge
when building a retirement strategy: research
conducted for Athene by scholars from the
UCLA Anderson School of Management offers
insights into how behavioral biases may be
keeping individuals from including annuities
in their retirement plan.
Realizing the role behavioral biases canplay in your planning process helps youunderstand, identify and address them asthey occur. Meanwhile, including behavioralfinance principles in planning can helpcounter many of the most common biases.For instance, a well-diversified portfolio witha thoughtful asset allocation strategy canprovide protection against market disruptionsand other challenges. With more confidence,clients may not feel like they have to act inresponse to short-term market events.
Connecting with your clients’ emotions andunderstanding their behavioral tendenciesis a holistic approach that can help thembetter pursue their goals and strengthenyour client relationships.
Two things you can do today:
1. Meet with your clients and steer thediscussion toward how they’re feeling inthe current environment.
2. Share with your clients how behaviors cancreate roadblocks to smart financial choicesto start the conversation.
This material is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Clients should consult their own tax, legaland accounting financial professionals before engaging in any transaction. An insurance licensed individual may not provide advice about securitieswithout being licensed as an investment adviser or registered representative through a broker-dealer. Please use caution when discussing yourcustomer’s finances to ensure you do not run afoul of securities law.
Athene Annuity and Life Company (61689), headquartered in West Des Moines, Iowa, and issuing annuities in 49 states (excluding NY) and D.C.,and Athene Annuity & Life Assurance Company of New York (68039), headquartered in Pearl River, New York, and issuing annuities in New York,are not undertaking to provide investment advice for any individual or in any individual situation, and therefore nothing in this should be read asinvestment advice.
ATHENE ANNUITIES ARE PRODUCTS OF THE INSURANCE INDUSTRY AND NOT GUARANTEED BY ANY BANK NOR INSUREDBY FDIC OR NCUA/NCUSIF. MAY LOSE VALUE. NO BANK/CREDIT UNION GUARANTEE. NOT A DEPOSIT. NOT INSURED BY ANYFEDERAL GOVERNMENT AGENCY. MAY ONLY BE OFFERED BY A LICENSED INSURANCE AGENT.
For more tips and tools from Athene, visit Athene.com/Resiliency