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Even the wealthiest investors aren’t immune to bias.
High-net-worth investors—often seen as rational and well-informed—admit to letting biases impact their decisions, particularly during uncertain times or major life events like retirement or divorce. Common pitfalls include risk aversion, overreliance on intuition, and confirmation bias, with 23% acknowledging the latter.
Financial advisers play a key role in addressing these challenges. By using data-driven strategies and AI, they help investors make more objective decisions, reduce anxiety, and build trust-driven relationships for better outcomes.
Read our whitepaper here: https://lnkd.in/gaAN4GpB
Hi, I'm Irvin, Head of Research here at Cordata. Recently we've done some interesting research in the high network space and I'd like to share some of our insights with you. In general conversations, there seems to be a prevailing expectation that these wealthy individuals, so those with over $1,000,000 in investable assets are paragons of investment acumen and people who are financially savvy and make good decisions. While that may be true that they are generally more. Financially attuned than the average person. This doesn't make them immune to investment biases. The majority of high net worth individuals we surveyed have stated that biases have impacted their decision making in the past. One of the most common examples would be confirmation bias. That's where people overvalue information that aligns with their own views. And the keyword here is over values, you know, without being particularly objective. Another common one would be activity bias where people have rushed to jump on opportunities or perhaps sell options without careful consideration. Essentially the urgency to go, go, go without fully considering all outcomes. This is where advisers and wealth management firms can really play a critical role in helping their clients. Make objective decisions. Reassuring clients that the choices are data-driven and less prone to emotional or cognitive biases can really help to build trust and drive client outcomes. If you'd like to know more about our high net worth research, please reach out to us at Cordata or visit our website. Thank you.
