Globally, money and personal finances are one of the largest sources of stress for people. Despite the criticality of personal finances for our lives and futures, research shows a pervasive financial illiteracy at even a basic level of knowledge for most people. The knowledge gap in personal finances is not the only (nor the most predictive) factor influencing people’s financial story—nor are intelligence, statistical abilities, or wealth. Indeed, even if in an ideal world we were to pass a national initiative to increase financial knowledge through targeted education, the reality is that individual decisions about money and personal finances are often emotional and reactive, rather than rational or strategic.
This white paper answers the question, what if we took the broader notion of personal finances out of the equation, and focus specifically on investments and investor-advisor relationships?