The Behavioral Divide with Hal Hershfield

In Part 1 of our Beyond the Math miniseries, we spoke about the challenges investors can face with decumulation in retirement. In Part 3, we dig into a tool often proposed to help: annuities. On this episode of The Behavioral Divide presented by Avantis Investors®, Professor Hal Hershfield interviews University of Illinois Professor Jeff Brown, author of the forthcoming book “Will My Money Last?”,...

For many, buying a home is the largest investment they’ll make, so it stands to reason that the decisions we make with mortgage loans matter. Yet, there are several persistent, predictable “mistakes” that are observed with mortgages.  On this episode of The Behavioral Divide presented by Avantis Investors®—and part two of our Beyond the Math miniseries—Professor Hal Hershfield interviews Columbia...

On the surface, many financial decisions may appear as simple math problems, but the numbers alone don’t always provide the “right” answer for everyone. One domain this applies is an investor’s decumulation phase—the period where our focus is no longer on accumulating savings for the future and becomes about how to draw on the nest egg we’ve built and fund our income in retirement. Social security...

Risk can be complicated. One client’s views on risk might vary quite a lot from another. Just the same, one’s feelings about risk can vary from today versus next year. Advisors often aim to uncover client attitudes toward risk through questionnaires, but what has the research shown works (or doesn’t) with these tools? What has been found that might help advisors better understand what motivates ho...

Much of the popular personal financial advice that reaches the average person doesn’t come from economists or professors. It often comes from writers and radio hosts that in some cases have amassed millions of followers and risen to prominence through widely available, low-cost financial guidance. On the next episode of The Behavioral Divide, Professor Hal Hershfield discusses this reality with Ja...

Change is hard. Helping others change isn’t always simple either. But we know, especially for folks like financial advisors, there will be times it’s important that you do. So, what can we do to make change easier, or to help others get where they want to go? On this episode of The Behavioral Divide, we cover exactly that. Professor Hal Hershfield speaks with two outstanding guests. He interviews...

Not all bad outcomes result from bad decisions just like not all good outcomes come from good decisions. This simple thought speaks to the importance of the process of making decisions and not just their results, particularly when any amount of luck is involved. We probably don’t want to repeat bad decisions just because last time we got lucky and things worked out great! On this episode of The Be...

Do you find that your emails to clients and prospects at times seem to go unread? You reach out. No response. What gives? When we’re dealing with busy people, how we approach and construct our communications matters. In fact, there are proven methods for increasing the chances that busy people respond or take the actions we need them to take. On this episode of The Behavioral Divide, presented by...

Quantifying risk with hard numbers and statistics is a logical first step to improving others’ understanding of potential outcomes, but there are ways we might do even better. There’s a science to risk communication born from years of research that identifies effective strategies for bringing meaning to risk conversations with people of varying backgrounds and numerical abilities.  On this episode...

Uncertainty is a constant in life—and especially in our financial lives. But not all uncertainty is created equal. Some arises from missing information we could know. Other times, the outcome is simply unknowable—or truly random. In this episode of The Behavioral Divide, UCLA Professor Hal Hershfield talks with decision science expert Professor Craig Fox to unpack the psychology of uncertainty. Th...

Did you know our financial decisions may be affected by our personality? It turns out being more agreeable, more conscientious, or more extroverted, for example, may play a role in how likely we are to choose to save our money for the future or spend it today instead. Research from Joe Gladstone, Ph. D., Assistant Professor at the University of Colorado Boulder Leeds School of Business, has found...

Parents know well the high costs of raising children. Certainly, this affects our ability to save for retirement or meet other financial goals, but what about when our kids leave home? How do empty nesters tend to respond financially, and psychologically? Work from Andrew Biggs, a Senior Fellow at the American Enterprise Institute and author of The Real Retirement Crisis: Why (Almost) Everything Y...

You may have heard the saying “everything in life is a negotiation.” It highlights the prevalence of negotiations across many facets of our everyday lives—sometimes with lower stakes like agreeing to an allowance with your children and in other cases much more impactful decisions that pertain to your career or that might affect long-term financial goals. If we can negotiate more effectively, it co...

There are obvious negative effects of financial stress—or financial constraints, in general. But how do financial constraints actually affect our decisions with money or in other areas of our lives? And while we may associate financial stress with those that have little money, anyone can feel constrained financially. For some, those constraints will be “real”, like truly struggling to make ends me...

Financial literacy has been found to be a strong predictor of future financial outcomes. A better understanding of fundamental financial concepts tends to lead to better decision making. Yet, the grim reality is that financial literacy among the global population is quite low. Past studies estimated that only about a third of the world are considered financially literate. But what can we learn fro...

There are plenty of logical reasons to devote some of our current wealth to future generations, such as supporting a better future for your family or society, the potential for estate tax benefits, and simply a common desire to build a legacy that endures beyond our lives. But tradeoffs abound when it comes to making such legacy decisions—not the least of which is how much do I want or need for my...

Fear of missing out, or FOMO, is something we can face in many different aspects of our lives. Whether it’s our investment portfolio, our social lives, our career status, and so on, we often compare ourselves against others and feel regret or fear when it seems like they are doing better than we are. On this episode, our focus is on why we face FOMO as investors and what we might be able to do abo...

Have you ever failed to stick with a New Year’s resolution? Chances are that’s a ‘yes’. The truth is that most only last a few months. And just like those resolutions to go to the gym three times a week or cook more often, setting financial goals, such as saving more or spending less, can be difficult to maintain. Achieving our goals typically requires self-discipline. But what can we do to increa...

Age is a topic many prefer to avoid. But, when it comes to financial decisions, age may be something we should be thinking about. Age can certainly play a role at different stages of our financial journey. On this episode, we look to the literature as well as speak with a long-tenured financial advisor to gain a firmer grasp on how exactly the choices we make are affected by age and understand wha...

While most would be happy to have more money, the reality is that more money may not lead to greater happiness for everyone. For many, living a fulfilled life goes beyond finances, so can we increase happiness and meaning in life through the decisions we make with our money today? To explore this question, we speak with UCLA Professor Cassie Holmes and an accomplished financial advisor, Joseph Jan...

We’ve all likely dealt with budgeting in one form or another, but is there any well-tested advice on how best to budget? And how does it fit into making progress toward longer-term goals like saving for retirement? In this episode of The Behavioral Divide, we get two perspectives. First, we interview wealth advisor Lowell Parker, CFP of Merriman Wealth Management, to discuss the role of budgeting...

There are many sources of conflict among couples, but money may be one of the biggest. In this episode of The Behavioral Divide with Hal Hershfield, we discuss how financial decisions are made within couples and explore ideas on how we might improve them. We first speak with Scott Rick, Ph. D., a professor of marketing at The University of Michigan’s Ross School of Business and author of Tightwads...