Monday, March 22, 2010
My financial adviser is a yes-man!
Fortune this week features new research by Harvard behavioral economist Sendhil Mullainathan. The research shows that most financial advisers tend to reinforce the biases in a client's investment strategy, rather than fundamentally altering the approach. Advisers seek to keep the first-time client coming back. Thus, they fail to confront the client and challenge the flaws in the investment portfolio. Do you have a financial adviser? Is he or she a sycophant? Does this person reinforce your predispositions?