BEHAVIORAL FINANCE TRAINING courses
Behavioral Finance and Business Impact
This training course explores the intersection of behavioral finance and traditional financial theories, emphasizing the effects of psychological biases on investment decisions and market behaviors. Attendees will analyze how these biases influence market anomalies and conflict with classic financial theories.
The course enhances client-advisory interactions by teaching participants to tailor strategies to individual clients’ behavioral tendencies and objectives. It also covers strategies for
mitigating and leveraging biases in portfolio construction. Through interactive and real-world examples, participants will boost their advisory skills and investment strategy development.
Ref: BFBI-225
Learning Outcomes
- Understand the contribution of behavioral finance to traditional financial theory.
- Grasp the behavior of financial markets through the lens of behavioral finance.
- Identify different types of clients' psychological profiles to better meet their expectations.
- Recognize the various cognitive biases of clients and prospects.
- Identify and analyze the impact of behavioral finance on the client-advisor relationship.
- Understand how behavioral biases influence portfolio construction.
Who Should Attend
- Fund Manager
- Portfolio Manager
- Wealth Manager
- Financial Analyst
- Member of an Investment or Credit Committee
- Any individual looking to recognize and identify their behavioral biases to enhance the relevance of their investment choices.
Duration
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2 days or 14 hours
Price
- €2250 + VAT for one participant.
- €1800 + VAT each for a group of 2 or 3 participants, only with group registration.
- €1450 + VAT each for groups of more than 3, only with group registration.
Tailored Training Solutions
- We offer the option to collaboratively develop customized programs.
- If you don't find precisely what you're looking for, we are here to assist you in constructing the perfect solution for your organization.
- Any of our courses can be delivered just for your team at a time and place that suits you. We can also co-create bespoke programmes, so if you can't find exactly what you need, we can help you build the right solution for your organisation.
Training Agenda
I. Definition, breakthrough, and contribution of behavioral finance
- Behavioral finance vs market efficiency theory
- Definition and characteristics of cognitive biases
- Definition and characteristics of emotional biases
- Definition and characteristics of social biases
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Practical Case:
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- Identifying the nature of a bias according to a given scenario (client vs advisor)".
II. Behavioral finance and financial markets
- Market anomalies
- Momentum:
- Anchoring bias
- Availability bias
- Disposition bias
3. Bubbles:
- Overconfidence bias
- Regret aversion bias
- Hindsight bias
4. Crashes:
- Anchoring bias
- Disposition bias
- Representativeness bias
- Quiz:
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- Identifying specific biases based on given scenarios.
III. How behavioral biases affect portfolio construction
- Naive diversification
- Familiarity bias
- Presentation bias
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Status quo bias
- Home bias
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- Quiz:
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- Identifying specific biases based on given scenarios.
IV. Typology and identification of (clients)-investor profiles based on their psychological biases
- The Barway model: active vs passive investors
- The Bailard, Biehl, and Kaiser model:
- The preserver
- The follower
- The independent
- The guardian
3. Behavioral classification of investors:
- The adventurer
- The celebrity
- The individualist
- The guardian
- The straight arrow
4. The top-down approach:
- Client interview to assess their general profile
- Determination of their risk tolerance
- Test of their main biases
- Classifying the client according to their behavioral profile
- Pratical Cases:
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- Drafting a standard questionnaire to identify client biases.
V. Behavioral finance and investor biases
- Biases affecting the decision-making of the individual investor
- Approaches to mitigate or correct the biases of the individual investor
- Practical Case:
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- Identification and analysis of biases and proposal(s) of solutions based on a given situation.
VI. Impact of behavioral finance in the client vs advisor relationship
- Identifying the client's objectives
- Identifying risk tolerance based on their behavioral biases
- Accounting for, quantifying, and qualifying change:
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- Regarding the client's situation and profile
- Regarding the client's risk tolerance
- Role-play:
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- Proposing a portfolio allocation to a client.
