Colin McLean: How behavioural finance can ramp up returns

BEHAVIOURAL FINANCE

Colin McLean, managing director of SVM Asset Management, explains how advisers should manage client anxiety for higher investment returns.

Investor psychology seems a bigger factor when shares are volatile, and certainly in the current choppy markets a renewed interest has been triggered in behavioural finance.  There have been good returns from equities following the financial crisis, but capturing those has not been easy. The Financial Conduct Authority is encouraging advisers to make use of behavioural finance. Both financial planning and regulation should be founded on an understanding of how consumers actually make decisions. But, advisers need real-world evidence and applications. How can an understanding of psy...