He noted that directly coaching investors and helping them grasp their weaknesses, such as being too risk-averse or too prone to taking risk, is still essential. “Technology will help all models become more effective and efficient in delivering better investment information,” Kholodenko added.īut technology alone won’t be enough to help investors navigate economic and industry shifts, warned Lewis.
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“From high advice to light-touch advice to self-directed models, having that choice and competition is very good,” he added, though he also said fees and return claims must be transparent, and investors should still get guidance on how to invest intelligently versus emotionally. in Toronto, who positioned that as a positive. “There is and will increasingly be a variety of models,” said Edward Kholodenko, president and CEO of Questrade Wealth Management Inc. They can use exercises to help people understand the limits of their market knowledge as well as better accept “careful, analytical” reviews of potential investments over unreliable online information.Īs market access and product lineups grow, investors might find it increasingly difficult to navigate the breadth of services available. “Advisors need to consider the psychological, social and contextual factors the decision to seek or follow advice,” Lewis said. To curb misplaced enthusiasm by investors, Lewis suggested that professionals like advisors find ways to address investor biases tied to overconfidence and people’s unwillingness to accept views and research that contradicts their own. He said investment professionals need to prepare clients emotionally for handling the aftermath of events like the quick market rebound in 2020 - a recovery event that not only affected investors who jumped out of the market but also those who wanted a piece of the recovery gain that they’d already missed.Īnd in an era where market access is growing and new products are being promoted daily, he called investor fear and bias “an element that seems to be getting worse,” with many individuals “afraid of missing out on the next big gain.” Under these conditions, investors need informed guidance.ĭavid Lewis, president of BEworks Research Institute in Toronto, said during the panel that support should come in the form of human-led behavioural finance coaching.
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“We were already seeing it before the pandemic with more money heading toward the exempt market, and of course there was the lifting of the legal limitations on cannabis, and then there’s been the crypto explosion and the increased use of leverage by retail investors,” Gross said.įurthermore, investors have been influenced by the pervasiveness of low interest rates for more than a decade - which has meant “no pathway forward for low-risk investing,” Gross said. Gross also said there have been “notable shifts” in investor behaviour, including those driven by FOMO, and changes in people’s portfolio holdings, which he attributed more to market hype and growth than to the Covid-19 crisis.