Advisor Insights

Use This Tool to Thwart Recency Bias in Clients

Michael Pompian

This is the ninth article in the Behavioral Finance and Macroeconomics series, exploring the effect behavior has on markets and the economy as a whole and how advisors who understand this relationship can work more effectively with their clients. 

Recency bias, an information processing bias, occurs when people more prominently recall and emphasize recent events and observations than those in the near or distant past.