This book looks at financial advisory from a behavioural perspective, and focuses on how the nature of the relationship between advisors and clients may affect the ability of the advisor to perform its functions. Broken into three key parts, the book looks at the client, the advisor, and the relationship between the two. Chapters review relevant theories of decision-making under risk to understand the nature of clients' decisions. The literature on advisors' functions and the normative landscape regulating financial advisory are also addressed. Finally, this book reviews how behavioural finance has traditionally addressed portfolio selection and explains how trust can be seen as a viable avenue to maximize advisors' effectiveness and pursue clients' needs.
This book will be of interest to both behavioural finance scholars and practitioners interested in understanding what the future of financial advisory may have in stock.
Caterina Cruciani holds a PhD in Economics from Ca' Foscari University of Venice, Italy, where she is currently Postdoctoral Researcher. She is also Operating Director and member of the Center for Experimental Research in Management and Economics (CERME) at Ca' Foscari University of Venice. Her research focuses on financial institutions, financial advisory, the determinants of trust in the client-advisor relationships, and behavioural finance. Caterina has taught Behavioural Economics at graduate level and Corporate Finance at undergraduate level, alongside an introductory course in Behavioural Finance offered to top professional financial advisors. Her publications are featured in international journals like the Journal of Economic Interaction and Coordination.
Chapter 1: Understanding financial biases.- Chapter 2: Addressing financial biases.- Chapter 3: Financial advisory: basic roles and functions.- Chapter 4: Financial advisory: normative developments and incentives.- Chapter 5: Behavioural financial advisory: taking stock and taking it to the field.- Chapter 6: Conclusions.