In this special Behavioral Finance Week episode of Framework, Jamie talks with Dr. Anna Madamba. Anna is a Senior Investment Strategist at Vanguard. Her research has focused primarily on behavioral trends within retirement and investment.

Growing up in the Philippines and watching a country develop around her,  Anna developed an interest in sociology and policy work. But she quickly discovered that finance and behaviorism were closely intertwined. After moving to the United States for graduate school, Anna began her career in market research before ultimately landing at Vanguard.

The bulk of Anna’s research lies in the decisions we make post-retirement and the role of trust in advisor relationships. Unfortunately, cognitive decline and financial errors are closely related, so it’s important for clients to plan for someone to handle their financial affairs well in advance.

Anna talks with Jamie about the necessity of planning for your financial future and why advisors should consider an advocacy-first approach.

Join us for our Behavioral Finance Week – daily episodes about the connection between psychology and money. These concepts can help financial advisors plan more accurately and sustainably for their clients. Tune in every day this week for a new episode!

(30:41) “I would say that everything outside of the operational stuff, everything else, the advice investors are looking for, they’re looking for it in the lens of the human advisor that they’re interacting with. And what they usually look for is all around. And again, the bigger drivers are around your peace of mind and your trust and advocacy.” ~ Dr. Anna Madamba

Main Takeaways

  • Trust can be more important in an advisory relationship than competence. Clients want their advisors to treat their investments like their own finances are at stake.
  • There’s no recipe for building trust with a client — it’s built over time.
  • Retirement is a perfect financial storm. There are so many transitions, both income- and lifestyle-related. And you’re more likely to experience cognitive decline which often leads to financial mistakes. Because it’s harder to recoup financial losses the older you get, planning for your retirement is incredibly important.
  • Deciding on a familial financial advisor can be tricky. For example, it would be unwise to choose someone in the same age generation, as they may experience cognitive decline as well.

Links and Important Mentions

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Join us October 12-14, 2021, in Las Vegas, or register for our digital-only conference. Register today at https://excellconference.com.

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