In today’s conversation, I’m speaking with Dr. Daniel Crosby, he’s a psychologist, behavioral finance expert and asset manager who applies his study of market psychology to everything from financial product design to asset allocation. He’s also been named one of the “12 Thinkers to Watch” by Monster.com, a “Financial Blogger You Should Be Reading” by AARP and was honored as one of the “Top 40 Under 40” by Investment News. Daniel is a New York Times and USA Today bestselling author, founder of Nocturne Capital, and his ideas have appeared in Huffington Post, Risk Management Magazine, Wealth Management and Investment News.

Today, we dive into his latest book “The Laws of Wealth: Psychology and the Secret to Investing Success.”  We discuss the 10 guiding principles that you can use to manage client behavior—including the essential ingredients your planning process needs to have in order to achieve the results that matter the most to your clients.

 

Here are a just a handful of the things that you’ll learn:
  • [06:08] What is “behavioral finance” and why it matters to financial advisors especially when dealing with how to best serve your clients.
  • [10:46] Why Daniel has hired his own financial advisor, even though he is obviously licensed and has the knowledge to do it himself.
  • [13:12] Daniel and I talk about the psychology behind the massive surge in Bitcoin prices and how to handle client questions on the currency itself.
  • [19:16] Why Daniel sees advisors more as behavioral coaches rather than asset managers—and the studies that show the direct benefits in greater returns for a portfolio.
  • [01:07:15] Daniel explains why he hopes there is no such thing as behavioral finance 25 years from now, definitely an interesting thing to say, coming from one of the foremost experts out there on Behavioral Finance.

SHOW NOTES:

  • [06:08] What is behavioral Finance?
  • [06:30] The most important truth every investor needs to understand, regardless of uncertainties in the market.
  • [10:46] Find out why Daniel pays a financial advisor—despite being one himself—to watch his back.
  • [13:12] Daniel shares his thoughts on Bitcoin and how to have these conversations with your clients—Remember, if you’re excited, it’s a bad idea!
  • [23:48] The psychology of willpower and how limited it really is.
  • [25:43] The big mistake a lot of advisors fall prey to when it comes to their own investing behavior and what you can do to better prepare.
  • [31:21] How to have those tough investment conversations with clients—Daniel shares his advice on beginning with why.  
  • [44:52] Why creating a plan isn’t enough—Find out how you can effectively communicate with your clients in a more meaningful way.
  • [48:01] Why you should leave the forecasting up to the weathermen!
  • [53:34] Diversification always equals frustration—and if it doesn’t, you’re not properly diversified!
  • [55:51] Risk is not a squiggly line—Discover the 2 types of rizk that are under discussed.
  • [59:09] Why you can be right and still be a moron!
  • [01:02:04] The first person Daniel thinks of when he hears the word successful and why?
  • [01:02:58] Daniel shares his favorite book he’s ever read and how it’s impacted his life.
  • [01:04:09] How did Daniel become a Behavioral finance expert?
  • [01:07:15] Find out why Daniel hopes there is no such thing as Behavioral Finance 25 years from now.
  • [01:08:40] The one piece of advice that’s lead to his success.

SELECTED LINKS FROM THE EPISODE

  • Connect with Daniel Crosby

Website | TwitterLinkedIn

PEOPLE MENTIONED IN THE EPISODE

REVIEW OF THE WEEK

Thanks for checking out the latest show, here’s this weeks featured review! This one comes to us from Certified Financial Planner Cam Hendricks who says:

Cam Hendricks - Elite Advisor Blueprint - iTunes Review

Thanks for the review Cam, I appreciate it! There are some amazing shows out there in our space, so to call my show the #1 option for financial advisors is an amazing compliment so THANK YOU, I’ll do my best to keep living up to those words! Also, as Cam took the time to connect with me out on Twitter, I want to give him a shout out as he just published his book Where Family & Finance Meet back in June, so go help a fellow financial advisor out and grab a copy of it, it’s available out on Amazon! By the way, I love connecting with all of our Blueprint listeners so if we haven’t yet, you can find me on Twitter @Brad_Johnson, make sure to let me know you found me from the podcast and please share any future guest ideas or your biggest takeaways or favorite episodes from the show so far!

Already heard it once or twice? Please leave a short review here, and tell me which guests I should have on!

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TRANSCRIPTS

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DISCLOSURE

This is provided for informational purposes only. Producers are ultimately responsible for the use or implementation of these concepts and should be aware of any and all applicable compliance requirements​. Results from the use of these concepts are no guarantee of your future success.

AE12174219 For financial professional use only