Behavioural finance: What SMSF professionals need to know and how they can use it

Technical Summit 2021

Insights from behavioural finance are increasingly being adopted by policy-makers and regulators. They now acknowledge that more traditional approaches to financial services regulation have failed. But while these new requirements represent a legal/regulatory ‘stick’ that will need to be complied with, there is also the client engagement ‘carrot’: SMSF professionals can use their knowledge of behavioural finance to better understand and influence their clients.

Through a number of interesting psychological studies, real-world examples and interactive workshop exercises, this session will discuss how SMSF professionals can apply psychological insights. How can these insights be used to better frame email communications and PowerPoint presentations? Or be applied to create investments reports and Statements of Advice that are more likely to be read? Or to conduct client conversations that are more likely to be understood? Subtle psychological strategies can sometimes create meaningful differences.

At the end of the session, you will be able to:

  • Understand how regulators are now thinking about behavioural finance, how it is changing the legal/regulatory environment, and the implications for SMSF professionals;
  • Understand how SMSF professionals can marry behavioural finance concepts with more traditional financial theories and practices in order to get the best of both worlds;
  • Determine the common misconceptions about behavioural finance, and how they can lead people to overlook important risks and opportunities, and;
  • Understand how to identify the relevant psychological issues in common client engagement scenarios, and how to apply behavioural finance principles to better engage with clients.

The contents of this resource are taken to be correct at the time of publication.

Disclaimer: Technical Papers contain factual information only and are prepared without considering particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. The information contained in this document does not constitute advice given by the SMSF Association to you. If you rely on this information yourself or to provide advice to other persons, then you do so at your own risk. The SMSF Association is not licensed to provide financial product advice, legal advice or taxation advice. We recommend that you seek appropriate professional advice before relying upon the information in this technical paper. While the SMSF Association believes that the information provided is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this paper is not considered financial advice for the purposes of the Corporations Act 2001. © SMSF Association