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What Is A Behavioral Financial Advisor (BFA) And How Can They Help You?



By Scott McCord, AAMS®, BFA™


Do you regularly wake up in the middle of the night in a cold sweat worrying about your retirement? Does your head hurt every time the Dow is down? Do the words “market selloff” make you crawl into a hole in your backyard and not come out until the next rally? Then it’s time to look at your Emotional Intelligence Quotient and why you need a Behavioral Financial Advisor.


Rational, Not Rational

Economists have hypothesized that the market is based on rational thinking. It argues that investors are rational in their decision-making, but we know that’s not always true. We’ve all panicked about a downturn in the economy at some point in our investing lives, making us want to sell off or hold onto a stock past its prime. Emotional investing is very much a thing, and economists and investors are taking notice.


Emotional Intelligence And Investing

Emotional intelligence (EI) is at the heart of keeping your emotions in check when investing. A recent study showed that up to 3% of investment performance is attributed to avoiding emotional decisions in your portfolio. (1) Self-awareness plays a large part in controlling your emotional response to market volatility. Knowing what your motivations and goals are is an essential step in learning what triggers you to act. For example, holding onto a particular stock because it was gifted to you by your grandmother is an emotional response. But not selling even if the fundamentals of the stock show you that it’s a losing proposition is detrimental to your portfolio. Understanding your emotions is critical in forming your investment strategy.


Controlling impulsive behavior is also an aspect of EI. (2) If your first impulse is to sell when there’s a downturn in the economy, ask yourself why. Is it based on data and facts or an impulse based on fear? Stepping back for a moment, taking a deep breath, and realizing your impulsive decisions could hurt you in the long run is another hallmark of self-awareness.


Self-confidence and adaptability are also part of EI. Being confident in your decision-making will help you stay the course and make decisions based on facts and not momentary emotional reactions. The ability to adapt to different scenarios and changes in the market will also help you manage your stress and emotions when making investment decisions.


A Behavioral Financial Advisor

You need a great financial planner to keep you on track to accomplish your goals. Someone who will hold you accountable and talk you off the proverbial ledge when downturns happen. At Anthem Financial, we coach investors through every aspect of investing, from education to helping you discover what you value most and how your financial plan fits into the life you want. We prepare you for uncertainty and give you the confidence that you are doing the right thing, even if your emotions tell you otherwise. As baseball icon Jimmy Dugan said, “There’s no crying in baseball,” and there’s no crying in investing either.


If you want to know more about behavioral financial advising, schedule a free introductory meeting online or reach out to us at scott@anthem-financial.com or 309-214-0152 with any questions.


About Scott

Scott McCord is founder and Investment Advisor Representative at Anthem Financial, providing values-based financial advice as a fiduciary. With over 20 years of experience in the financial industry, Scott focuses on building long-term relationships with his clients so he can understand their unique values and guide them through the ups and downs of their financial lives, keeping them focused on their short-term and long-term financial goals. Scott has a bachelor’s degree in business management and accounting and holds the Behavioral Financial Advisor™ (BFA™) and Accredited Asset Management Specialist (AAMS®) certifications, the Series 7 and 66 licenses, as well as life, health, and disability income insurance licenses. Scott is married to his intellectual and spiritual ally, Heather, and together they have two beautiful children, their daughter, Meyer, and their son, Grady. When Scott is not focusing on his clients and family, he volunteers his time on the Peoria Public Schools Foundation board, Impact Peoria board, and Rotary of Downtown Peoria board. To learn more about Scott, connect with him on LinkedIn.


DISCLOSURES

Investment Advisor Representative of and advisory services are offered through Independent Wealth Network, Inc. A Registered Investment Advisor. Anthem Financial is not affiliated with Independent Wealth Network, Inc.

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(1) https://www.investopedia.com/financial-advisor/advisors-role-behavioral-coach

(2) https://hbr.org/2017/02/emotional-intelligence-has-12-elements-which-do-you-need-to-work-on



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Investment Advisor Representative of and advisory services are offered through Independent Wealth Network, Inc. a Registered Investment Advisor.  Anthem Financial is not affiliated with Independent Wealth Network, Inc.