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Swiss BeFi Experts Refining Tools

Behavioral finance expert and Swiss professor Thorsten Hens is refining behavioral finance tools to make it possible for advisors and financial institutions to use them in an even more precise manner. Thinkadvisor reports that Hens is developing a model that would allow advisors and investors an interactive way to view risk, and is teaming with neuroscientists to discern whether biology plays a part in willingness to accept — or aversion to — risk.

Hens, along with Enrico Giorgi and Dieter Niggler, who also are behavioral finance experts and Swiss professors, studied the behavior and financial activities of individuals in 52 countries in developing their approach. Their firm applies that approach in a manner that allows advisors and financial institutions to understand clients’ financial decisions in light of a variety of factors. It does not assume that all customers are the same, regardless of location and natioanality; it recognizes the importance of understanding circumstances and nuances unique to particular countries and cultures. Their tools include: 

  • a custom-designed diagnostic questionnaire that fits a particular advisory process and is designed to identify individuals’ biases and preferences;
  • a model that figures out how an investor defines gains, losses and risks, and then builds a function that represents the investor’s decision-making process, based on what it learns about that investor; and
  • a tool that determines a particular individual’s risk profile and allows an advisor to create a unique portfolio tailored to that individual.

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