• / Free eNewsletters & Magazine
  • / My Account
Home>Practice Management>Practice Builder>Get the Picture on Framing Bias

Related Content

  1. Videos
  2. Articles
  1. Why Alternatives Investors Should Target Minimum Allocations

    Van Eck's David Schassler focuses on multialternative strategies for his clients and says any alternative allocation lower than 10% enters into 'why bother?' territory.

  2. Don't Pay Alpha Fees for Beta Performance

    Hedge fund -replicating ETFs and mutual funds can provide investors with similar return characteristics at a much lower cost, says Index IQ's Adam Patti.

  3. Grantham Keynote: Investing in a Slower-Growth World

    The GMO chief strategist highlights the factors behind the market's bullish bias, abnormally high corporate earnings, current valuation levels, a slowdown in productivity, and the great paradigm shift in natural resources.

  4. Going Against the Grain in Hedge Fund Replication

    Ramius' Vikas Kapoor discusses some of the drawbacks of common replication strategies and how his fund strives to avoid them while still providing the liquidity often absent in regular hedge funds .

Get the Picture on Framing Bias

How you ask questions can have a profound impact on how your clients respond--and therefore how financial plans are implemented.

Michael M. Pompian, 08/27/2015

This month's article is the seventh in a series called "Behavioral Finance and Retirement," which is intended to provide insight to advisors on the unique needs and financial behaviors of clients who are entering that period of transition called "retirement."

I put retirement in quotation marks because people today are not retiring the way they used to. The days of the retirement party, the gold watch, and sitting out one's years doing crossword puzzles and watching "Wheel of Fortune" are over for most people.

We've all heard the analogy that the baby boomers are like a baseball going through a garden hose. Well, the baseball is getting to the end of the hose, and it's not leaving without a bang! And before it leaves, it will be a financial force to be reckoned with.

To serve retired clients properly, there are some key themes that advisors need to be aware of:

1. People are living longer than ever thanks in part to medical technology and better living habits such as diet and exercise. This is extending the length of time people are in a nonworking phase of life.

2. People's definition of retirement is changing, which is having a major impact on how individuals manage their finances.

3. In some cases, a certain segment of the population will have no choice but to produce some type of income after they leave the traditional workforce.

4. The responsibility of planning and investing for retirement has shifted in large part to the employee/retiree and away from corporations. As a result, behavioral biases significantly affect individuals who are entering or already in this phase of life.

The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

blog comments powered by Disqus
Upcoming Events
Conferences
Webinars

©2014 Morningstar Advisor. All right reserved.