Question 2 Wealth Management & Behavioural Investor Types (BITs)

You have just been employed by an Irish wealth management firm on their private clients division. You are familiar with Michael Pompians book Behavioural Finance and your Portfolio which has described the 4 BITs Preservers, Followers, Independents, and Accumulators. You mention to your supervisor that understanding an investors behavioural biases can help financial advisors and planners tailor their advice to meet the clients needs and help them make better investment decisions. Your supervisor then asks you to write a detailed brief to assist the firm profile their clients:

You are then asked to prepare a briefing note on two BITs Preservers and Accumulators. As

outlined by Pompian, you should discuss the following issues: What personal biases are likely driving each investor's behaviour and decision-making? How might the investor's personal biases affect the investment strategy and solution decision? How should the firm moderate or adapt the impact of these biases? What is the best investment strategy and solution for each investor?

(1200 1500 words, 18%)