WealthTech on Deck

Risk Management Tools and the Future of Behavioral Finance with Daniel Crosby

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In this episode, Jack talks with Daniel Crosby, Chief Behavioral Officer at Orion Advisor Solutions.

Daniel is a psychologist and a behavioral finance expert who helps advisors and investors understand the psychology of financial markets. He believes that through tools, such as the Irrationality Index and the new 3D Risk Profile from Orion, we'll be able to assess emotional reactions to volatility.

Daniel and Jack discuss the benefits of risk management tools, the role of human behavior and psychology in investing, and the future of behavioral finance.

"We need to educate clients and advisors about the realities of behavioral finance. We need the right environment, the right portfolio mix for them, but we also need that encouragement that's happening just in time to educate people when they're on the precipice of making a decision.” ~ Daniel Crosby


Main takeaways 

  • Leverage the three ‘T’s to ensure clients implement the best advice: training, tools, and technology.
  • Look at risk from a variety of angles so portfolio management and asset allocation are consistent throughout. A risk tolerance questionnaire can give you insights into an individual’s human behavior and psychology.
  • The biggest value an advisor can provide is behavioral coaching, emotional management, and decisional coaching. Teaching people about achieving high returns is just secondary.
  • Precommitment in investing is a vital part that measuring risk composure fulfills. It makes sure investors are aligned with their set preferences, and it prevents future deviations.
  • The future of behavioral finance is embedded in the three ‘E’s: education, environment, and encouragement.


    • Links

    • Daniel Crosby on LinkedIn
    • Daniel Crosby on Twitter
    • Brinker Capital
    • Eric Clarke
    • HiddenLevers
    • Alexandria McCarthy
    • Personal Benchmark: Integrating Behavioral Finance and Investment Management by Charles Widger
    • Warren Buffet
    • Dalbar
    • Morningstar
    • Michael Lee
    • Daniel Kahneman


      • Connect with our hosts

      • LifeYield
      • Jack Sharry on LinkedIn
      • Jack Sharry on Twitter


        • Subscribe and stay in touch

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          WealthTech on DeckBy LifeYield
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