Earlier this year, CLS began to research behavioral investing with the help of local Ph.D.s at Omaha’s own Creighton University. The goal was a little different from typical studies of behavioral investing biases, which have been well documented. What CLS set out to do was help advisors help their clients by identifying investors’ common traits and attributes, which could predict how an investor reacts to certain events. The study, which is now complete, presents findings that we believe will better equip advisors to coach investors. A complete review of the study can be found here.

The pie charts below show some preliminary results of pilot testing conducted during the study. (In late 2017 and early 2018, we expect to have a client assessment ready to help advisors and investors alike.) We received survey responses from a roughly even number of males and females with a wide range of income and education levels.

Our findings show:

• A large majority of respondents trust advice from a qualified professional.
• Only about 3% did not trust the advice of financial professionals.
• The results definitively show financial professionals have an important role to play in helping investors reach their goals.

• There appears to be plenty of people who need qualified investment advice as a majority have some to zero experience.
• Approximately 80% of respondents have investment experience and about one-third say they have a lot of experience.

• About 80% of respondents say their reason for investing is to provide for others, such as family.

• Not quite half of respondents invest to realize a goal of donating.

• 85% of respondents do not invest for power and influence.

• About two-thirds of respondents invest to leave some sort legacy to heirs.

• Finally, the most common reason to invest is peace of mind.
• Almost all respondents invest to achieve this state, which explains why we get so emotional about our investments.

The findings are pretty much what we expected to see, which is good as we can now fine tune the assessment, lower the number of questions, and ultimately make it easier for advisors to identify and help clients.

We expect much more to come on this in the next month or two, so please stay tuned for a full report along with ideas about how to use this to better service existing clients and attract new ones.

3286-CLS-12/12/2017