Reference no: EM133512482
Question (a) Identify the key behavioural finance issue presented in this scenario BY THE CLIENT. Include in your response a brief definition of the issue. Note: I am fairly confident that the key behavioural issue here is authority bias / heuristic, not anchoring bias...
Question (b) Provide evidence from the scenario to support your assessment. the fact that the client is relying on what the adviser without questioning her seems to make me choose authority bias.
Question (c) In the context of the scenario provided, discuss the consequences of the impact of this issue and how it may affect or influence the client-adviser relationship and the outcomes of the client engagement if the issue is not identified and addressed appropriately.
Question (d) Provide an overview of steps/actions that could be taken to address or remedy the issues that have been identified.
Question (e) Discuss the communication approach the adviser has taken with the client and consider the following questions in your response:
• Did the adviser show any evidence of their own bias in guiding the client as to what actions to take?
• What further investigations of the client's position, including their risk profile, could the adviser have undertaken in the meeting?
• How has the adviser addressed the client's concerns, particularly in relation to the pension issue?
• What response is the client demonstrating to the adviser?
Question (f) Provide two (2) specific recommendations for how the adviser could better communicate with the client. Please note that this should address the advisers failing in their emotional intelligence and communication skills, rather than technical advisory skills