The Power of Emotion

By: Anthony Villis
Managing Partner
First Wealth

Clients tend to seek advice when big life events come along: selling a business, stopping work, a new business, birth of a child, a new house, ill health, divorce. It’s no surprise that people often have heightened emotions that affect their decisions.

Looking back over my career, emotion is something I’ve always been aware of, and thought I understood, when giving advice to my clients. But when it came to clients not following my advice, I tended to reach for comfortable excuses.

Maybe it wasn’t them. Maybe it was me

Maybe I just didn’t know enough about the emotional biases that stopped them from acting on my advice?

In 2015, my family went through a life-changing experience of our own and came out the other side with a much deeper understanding of just how powerful emotional decision-making can be… even for a financial professional like me.

I now believe that behavioural insight and coaching is the MOST important part of our role as Financial Planners. Now an understanding of the behavioural drivers of decision making lies at the centre of everything my firm does.

The best of times, the worst of times

On 25 January 2015, my fiancé Petra and I welcomed our beautiful daughter, Lux, into the world. After a long time trying to start a family, we were both incredibly excited about becoming parents and looking forward to everything that went with it.

Just over two months later (on April Fools’ Day!) Petra was diagnosed with early-stage, triple-negative breast cancer.

The news was a massive shock and we quickly shifted into survival mode. What do we need to do today, tomorrow, next week to survive physically, emotionally and financially as a family?

Instead of cooing over the milestones of Lux’s first year, we were staring down the barrel of a course of chemotherapy, ominously known as the Yellow Devil, and planning for Petra’s double mastectomy. It was an incredibly tough time, but thankfully she is recovering amazingly well, and we count ourselves
hugely lucky.

We’ve all heard the clichés: “you only live once”, “life is not a rehearsal”. But, in my experience, it takes the sledge-hammer
impact of a blow like this to make you really sit up and listen. Well, after chemotherapy, a double mastectomy and sepsis, we were now listening intently.

A sea change

By this point, we’d lived in London for 15 years, often talked about moving away, but always found a reason not to. Unsurprisingly, the financial ramifications were a focus for me and I ran through a litany of reasons not to move.

I’ve studied behavioural economics extensively. And yet, here I was letting emotional biases stop me from making an important life decision.

It was Petra who eventually cut to the heart of the issue and asked the right question: “Do we, as a family, want to live in London anymore?”. The answer was “No”. And the rest was easy.

We both wanted to live by the beach, and having grown up in Dorset as a boy, it was the obvious choice for us. We embarked on our own life-changing Financial Planning process: what did we need to do to be able to afford to move to the South Coast?

We’ve been here for two years now and we’ve never been happier.

Understanding the biases

Our experience was ultimately empowering and reinforced for me the incredible Power of Financial Planning done well. But it also highlighted to me how easily cognitive biases can stop us from progressing in life.

If we really want to deliver life-changing Financial Planning, we need to understand the biases that can stop clients making good decisions they feel great about.

Sounds easy right? Well, there are 188 known cognitive biases that could stop your client from achieving their goals. And understanding where all 188 biases come from, alongside all the expert financial knowledge we need for our jobs, is not realistic.

We’ve recently completed a series of articles and eBook on behavioural finance in partnership with our client and friend, Brett Kahr, Professor of Psychotherapy at the Balint Consultancy. We explore how the common biases can impact decision-making.

The guide is designed to remove a common blind spot about the impact of behavioural biases in financial decision making. As Brett says: “The capacity to receive advice from an expert adviser may very well be a good barometer of mental health.” A philosophy we like to apply to ourselves as well as our clients.

Designing the client experience

As a result of our work with Brett and our passion for helping our clients make the best decisions possible, we’ve incorporated a number of behavioural tools into our Financial Planning process.

We use the ‘Money Habitudes’ tool to assign a money personality to each of our clients. The tool lays out six money personalities into which people generally fall: Giving, Planning, Security, Spontaneous, Status and Carefree. None of the habitudes are good or bad, per se, but it is an incredibly valuable tool to create awareness in our clients of the emotional response they may have to a financial decision.

This also allowed us to tailor our communications to clients and share messages that we knew would resonate with them. By addressing the needs and concern of each money personality, we can make our newsletters more relevant, design ‘nudge’ messages to prompt action and create a more rewarding client experience.

Creating client advocates

I’m happy to say that our new approach to incorporating behavioural tools in our Financial Planning process has been just as enlightening for our clients as it was for me. Clients describe it as ‘eye-opening’, ‘empowering’ and ‘liberating’. We’ve helped people to find the confidence and financial security to make big decisions and live the lives they want to. Because: “Life is not a dress rehearsal!”

The best plan in the world means nothing if you don’t act on it.

Since implementing our holistic approach to working with our clients, we’ve helped more and more of our clients to actually live the lives they dream of, not just talk about it.

And surely, this should be at the centre of everything we do as Financial Planners.


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