Wealth clients can be lazy and / or stubborn, or just simply naïve in their investment strategy. Cognitive and emotional biases such as domestic ‘safety’,
reference dependence, over-confidence, or fear of volatility (loss aversion) can lead to some serious misallocation of assets and lead to increased
portfolio risk. This one-day program aims to do 2 things:

1) review traditional portfolio theory in the eyes of perfect information and rational, risk-averse investors

2) appreciate and explain some commonly found behavioural biases, and how to argue against them

This program is ideally combined with a skills workshop on Influencing Skills. The main problem wealth relationship managers have is engaging with newer
or stubborn clients who are not open to change. The Influencing skills workshop will be applied in the context of behavioural bias to show delegates
how to engage with their clients and start to influence their decision making.

Outline of topics covered


Portfolio Management & Asset Allocation

•Groups of 4-5 will write out on Post-its what they perceive to be the key components in asset allocation depending upon the risk level
of the following investor types:




◦By age group

◦Discussion on the group findings


◦ Client profiling – detail to be confirmed Activity:

◦Identify key market factors affect portfolio performance:



▪Moves in the underlying asset class


▪Interest rates

▪Credit spreads

▪What else?

◦How do you measure risk/reward?


▪Finance definition vs reality

▪Reality vs logic – discussion

▪How can investors synthetically increase or decrease risk in their portfolios?




◦Do options and futures have a role in your portfolio?

Behavioral finance

Cognitive and emotional bias explained

◦Confirmation bias

◦Herd mentality (fear of missing out)

◦Gamblers fallacy

◦Negativity bias

◦Loss aversion and hidden risk-seeking



◦Mental accounting

Cases – each attribute will be explored through review and discussion of a client scenario. This will enable delegates to spot similarities in their own client portfolios and help them enter into discussions with their own clients.

Client portfolio review – ahead of the class, delegates will be asked to pick a client, anonymous, and bring along sufficient information to allow a group analysis and discussion around potential inefficiencies and mis-allocations. Potential behavioral flaws will be identified and role-play will allow delegates to go away with a client engagement plan.

The Practical Portfolio Management 1 day program then leads into a Wealth Asset Allocation MasterClass case study for 2 days.