Overview
- Key takeaway for asset managers: Herd mentality can be dangerous to investors’ financial health.
- How you can help: Share our digital toolkit, which has client-ready assets advisors can use now.
- Why it works: These digital assets allow advisors to meaningfully engage with clients while in-person meetings remain difficult.
When it seems like everyone else is rushing into the markets—or rushing out—it can be hard for individual investors not to join in. Financial markets are ruled by crowds. When investors flood in, prices go up—and when they flee en masse, the bottom falls out.
But a deliberate approach to investing can prevent poor investment timing or missed opportunities. To support advisors as they encourage their clients to resist herd mentality, we created a digital toolkit, “Avoid Following the Crowd—and Watch for Opportunities.” It shares research on behavioral finance and data to augment the argument that investors are better off making their own decisions.
- Say no to FOMO (fear of missing out): A study by the CFA Institute found that more than a third of investment professionals were influenced by peers to follow trends. Plus, investors are susceptible to “action bias,” a behavioral finance term for the urge to do something rather than nothing.
- Don’t rush into trouble: Market timing is nearly impossible. In the 20 years from 1999 through 2018, six of the 10 best market days came within two weeks of the 10 worst days.
- You do you: It’s important for investors to remember why they’re investing in the first place. Focusing on their goals—retirement, a second home, their kids’ education—will help them think long term and avoid the often counterproductive results of following the crowd.
How to Use the Digital Toolkit in a Marketing Funnel
The Digital Toolkit comes with client-ready assets that allow advisors to engage digitally without sacrificing the quality of in-person connections. Your advisors can use these digital assets throughout their marketing funnel.
Step 1: At the Top Of The Funnel (TOFU)
The advisor posts a graphic on LinkedIn.
Step 2: In the Middle Of The Funnel (MOFU)
The advisor emails an article to people who comment on, like, or share the LinkedIn post.
Step 3: At the Bottom Of The Funnel (BOFU)
The advisor hosts a digital meeting and uses the conversation guide’s talking points and graphics.
