{"product_id":"behavioral-finance-for-private-banking-isbn-9781119453703","title":"Behavioral Finance for Private Banking","description":"\u003cp\u003e\u003cb\u003eAn essential framework for wealth management using behavioral finance\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eBehavioral Finance for Private Banking\u003c\/i\u003e provides a complete framework for wealth management tailored to the unique needs of each client. Merging behavioral finance with private banking, this framework helps you gain a greater understanding of your client’s wants, needs, and perspectives to streamline the decision making process. Beginning with the theoretical foundations of investment decision making and behavioral biases, the discussion delves into cultural differences in global business and asset allocation over the life cycle of the investment to help you construct a wealth management strategy catered to each individual’s needs. This new second edition has been updated to include coverage of fintech and neurofinance, an extension of behavioral finance that is beginning to gain traction in the private banking space.\u003c\/p\u003e \u003cp\u003eWorking closely with clients entails deep interpersonal give and take. To be successful, private banking professionals must be as well-versed in behavioral psychology as they are in finance; this intersection is the heart of behavioral finance, and this book provides essential knowledge that can help you better serve your clients’ needs.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eUnderstand the internal dialogue at work when investment decisions are made\u003c\/li\u003e \u003cli\u003eOvercome the most common behavioral biases—and watch for your own\u003c\/li\u003e \u003cli\u003eLearn how fintech and neurofinance impact all aspects of private banking\u003c\/li\u003e \u003cli\u003eSet up a structured wealth management process that places the client’s needs front and center\u003c\/li\u003e \u003c\/ul\u003e Private banking clients demand more than just financial expertise. They want an advisor who truly understands their needs, and can develop and execute the kind of strategy that will help them achieve their goals. \u003ci\u003eBehavioral Finance for Private Banking\u003c\/i\u003e provides a complete framework alongside insightful discussion to help you become the solution your clients seek. \u003cp\u003e\u003cb\u003eChapter 1 Introduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Behavioral Biases 5\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Information Selection Biases 6\u003c\/p\u003e \u003cp\u003e2.2 Information Processing Biases 11\u003c\/p\u003e \u003cp\u003e2.3 Biases after Receiving Feedback 31\u003c\/p\u003e \u003cp\u003e2.4 Are More Heads Smarter Than One? 33\u003c\/p\u003e \u003cp\u003e2.5 Summary of Biases 35\u003c\/p\u003e \u003cp\u003e2.6 Conclusion 39\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Cultural Differences in Investors’ Behavior 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 What Is Financial Culture? 41\u003c\/p\u003e \u003cp\u003e3.2 The INTRA Study 43\u003c\/p\u003e \u003cp\u003e3.3 Conclusion 46\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Neurological Foundations and Biases’ Moderation 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 The Human Brain 47\u003c\/p\u003e \u003cp\u003e4.2 Insights for Behavioral Finance 48\u003c\/p\u003e \u003cp\u003e4.3 Moderation of Biases 49\u003c\/p\u003e \u003cp\u003e4.4 Conclusion 50\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Diagnostic Tests for Investment Personality 51\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 A Case Study 51\u003c\/p\u003e \u003cp\u003e5.2 Design of Diagnostic Questionnaires 52\u003c\/p\u003e \u003cp\u003e5.3 Knowledge and Investment Experience 53\u003c\/p\u003e \u003cp\u003e5.4 Psychology and Emotions 59\u003c\/p\u003e \u003cp\u003e5.5 Client’s Diagnostic Profile 65\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Decision Theory 69\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Introduction 69\u003c\/p\u003e \u003cp\u003e6.2 A (Very) Short History of Decision Theory 70\u003c\/p\u003e \u003cp\u003e6.3 Expected Utility 73\u003c\/p\u003e \u003cp\u003e6.4 Mean-Variance Analysis 76\u003c\/p\u003e \u003cp\u003e6.5 Prospect Theory 78\u003c\/p\u003e \u003cp\u003e6.6 Rationality of Mean-Variance and Prospect Theory 87\u003c\/p\u003e \u003cp\u003e6.7 The Optimal Asset Allocation 91\u003c\/p\u003e \u003cp\u003e6.8 Comparing the Decision Theories 102\u003c\/p\u003e \u003cp\u003e6.9 Conclusion 103\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Product Design 105\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Introduction 105\u003c\/p\u003e \u003cp\u003e7.2 Case Study 107\u003c\/p\u003e \u003cp\u003e7.3 Theory of Product Design 114\u003c\/p\u003e \u003cp\u003e7.4 Structured Products Designed by Customers 120\u003c\/p\u003e \u003cp\u003e7.5 Conclusion 123\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Dynamic Asset Allocation 125\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Time Diversification 126\u003c\/p\u003e \u003cp\u003e8.2 Rebalancing 129\u003c\/p\u003e \u003cp\u003e8.3 Conclusion 134\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Life-Cycle Planning 137\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Case Study 137\u003c\/p\u003e \u003cp\u003e9.2 Case Study Werner Bruni 139\u003c\/p\u003e \u003cp\u003e9.3 Consumption Smoothing 140\u003c\/p\u003e \u003cp\u003e9.4 The Life-Cycle Hypothesis 141\u003c\/p\u003e \u003cp\u003e9.5 The Behavioral Life-Cycle Hypothesis 143\u003c\/p\u003e \u003cp\u003e9.6 Conclusion 146\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Risk Profiling 147\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Risk-Profiling Methodologies 148\u003c\/p\u003e \u003cp\u003e10.2 Comparing Risk-Profiling Methodologies 151\u003c\/p\u003e \u003cp\u003e10.3 A Case Study 152\u003c\/p\u003e \u003cp\u003e10.4 The Risk Dimensions 153\u003c\/p\u003e \u003cp\u003e10.5 Behavioral Risk Profiler 155\u003c\/p\u003e \u003cp\u003e10.6 Risk Profiling and Its Regulation 166\u003c\/p\u003e \u003cp\u003e10.7 Conclusion 167\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Structured Wealth Management Process 169\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 Benefits 172\u003c\/p\u003e \u003cp\u003e11.2 Implementation 173\u003c\/p\u003e \u003cp\u003e11.3 Regulatory Requirements 174\u003c\/p\u003e \u003cp\u003e11.4 Structuring the Wealth Management Process 177\u003c\/p\u003e \u003cp\u003e11.5 Relevance of Different Theories 196\u003c\/p\u003e \u003cp\u003e11.6 Complying with the Regulatory Requirements 197\u003c\/p\u003e \u003cp\u003e11.7 Information Technology in Client Advisory Services 197\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Fintech 201\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e12.1 History of Fintech 201\u003c\/p\u003e \u003cp\u003e12.2 Current State of Fintech 201\u003c\/p\u003e \u003cp\u003e12.3 Assessment of Fintech Solutions 202\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Case Studies 203\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e13.1 Case Study 1: Structured Wealth Management 204\u003c\/p\u003e \u003cp\u003e13.2 Case Study 2: Experience Sampling 209\u003c\/p\u003e \u003cp\u003e13.3 Case Study 3: Goal-based Approach 210\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Conclusions 219\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Appendix: Mathematical Arguments 221\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e15.1 Proof that Expected Utility Satisfies the Axioms of Rational Choice 221\u003c\/p\u003e \u003cp\u003e15.2 Derivation of the Fourfold Pattern of Risk Taking 222\u003c\/p\u003e \u003cp\u003e15.3 Mean-Variance as a Special Case of Prospect Theory 222\u003c\/p\u003e \u003cp\u003e15.4 Prospect Theory Optimal Asset Allocation 224\u003c\/p\u003e \u003cp\u003e15.5 No Time Diversification Theorem 225\u003c\/p\u003e \u003cp\u003eReferences 227\u003c\/p\u003e \u003cp\u003eIndex 235\u003c\/p\u003e   \u003cp\u003e\u003cb\u003eKREMENA BACHMANN\u003c\/b\u003e is senior research associate at the University of Zurich, senior lecturer at the Zurich University of Applied Sciences (ZHAW) and academic advisor at Moor \u0026amp; Bachmann AG, a Swiss multi-family office. As a behavioral finance researcher publishing in peer-reviewed journals she is also actively engaged in the development of practical solutions that help to improve financial decision making. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eENRICO DE GIORGI\u003c\/b\u003e is professor of mathematics and director of the institute of mathematics and statistics at University of St. Gallen. He is also associate editor of \u003ci\u003eMathematics and Financial Economics\u003c\/i\u003e and\u003ci\u003e Decisions in Economics and Finance\u003c\/i\u003e and founding partner of BhFS Behavioral Finance Solutions. His research has been published in the top peer-reviewed journals in Finance and Management. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eTHORSTEN HENS\u003c\/b\u003e is a professor of financial economics and a member of the directorate of the department of banking and finance at the University of Zurich. He is a founding partner of BhFS Behavioral Finance Solutions, Swiss Fintech Innovations and the University of Zurich Research Priority Program on financial regulation, Finreg. He is a coauthor of 60 peer-reviewed scientific publications and seven books.     \u003c\/p\u003e\u003cp\u003eSound investment theory doesn't always translate well into private financial advising because clients come with a diverse mix of emotional, cultural, and biological biases. After all, they are human. As financial advisors, it's often difficult to custom fit investment strategies to the personal traits of private investors. \u003ci\u003eBehavioral Finance for Private Banking\u003c\/i\u003e offers a prescriptive framework to personalize investment decisions with insights from behavioral psychology. \u003c\/p\u003e\u003cp\u003eFrom assessing a client's behavioral biases to building an optimal portfolio and successfully managing it over time, this practical guide serves as a deep resource of up-to-date information and robust tools for the everyday advisor. In addition to fresh insights and the latest best practices from the original authors, fellow thought leader at BhFS, Enrico De Giorgi joins this \u003ci\u003eSecond Edition\u003c\/i\u003e to offer greater depth of coverage into the mathematics behind the strategic solutions inside. \u003c\/p\u003e\u003cp\u003eIn addition to illuminating the useful research and theories behind behavioral finance, this comprehensive reference for the real world also debunks the most common myths about investor behavior and offers concrete approaches to handling each type of investor personality. New advisors and experienced ones, alike, can add a valuable layer to their skillsets by mastering how to: \u003c\/p\u003e\u003cul\u003e \u003cli\u003eExpertly align asset allocation and investment products to client risk profiles and perspectives\u003c\/li\u003e \u003cli\u003eUnderstand which clients will rebalance, take profits, or increase risk during the lifecycle of their portfolios\u003c\/li\u003e \u003cli\u003eApply the latest findings in behavioral finance to enhance your wealth management process\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eGrow wealth in a way personally advantageous to each client with \u003ci\u003eBehavioral Finance for Private Banking, Second Edition\u003c\/i\u003e.    \u003c\/p\u003e\u003cp\u003e\u003cb\u003ePraise for\u003c\/b\u003e \u003cb\u003eBehavioral Finance for Private Banking\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\"This book provides investment professionals with skills they need to help investors craft sensible portfolios that are suitable for the financial world as it is. The world we face is one in which investors have psychological needs that go beyond mean-variance efficiency, systematic biases that interfere with perfect rationality, and financial markets which do not efficiently impound information into prices. Readers of this book will come away with a set of tools that provide them with a competitive advantage when it comes to providing clients with realistic advice that is tailored to their situations.\" \u003cb\u003e —Hersh Shefrin,\u003c\/b\u003e Mario L. Belotti Professor of Finance, Santa Clara University \u003c\/p\u003e\u003cp\u003e\"This book provides a long-needed connection between decision theory and finance theory while—and this is its strongest point—connecting with applications throughout. Its main novelty is the use of recent behavioural insights, where the authors are best equipped for this task because they are leading experts. It leads to much more realistic understandings of investors, inefficient markets without arbitrage corrections, optimal financial advices in private banking, and so on, bringing scientific insights into what could only be an art in the past. This book is a must for everyone interested in the practical relevance of modern finance.\" \u003cb\u003e —Peter Wakker,\u003c\/b\u003e Professor of Decisions Under Uncertainty, Econometric   Institute of Erasmus School of Economics (ESE), Rotterdam \u003c\/p\u003e\u003cp\u003e\"The ongoing fintech revolution is one of the major challenges of private banking. To master it, a thorough understanding of investor behavior is necessary. \u003ci\u003eBehavioral Finance for Private Banking\u003c\/i\u003e shows how scientific methods support practitioners in mastering the challenges of the next decade integrated in a convincingly smart advice process.\" \u003cb\u003e —Marianne Wildi,\u003c\/b\u003e CEO, Hypothekarbank Lenzburg \u003c\/p\u003e\u003cp\u003e\"Exciting times beckon us as we now stand at the crossroads of multiple paradigm shifts. Take Tesla's self-driving car, which spurred the public's enthusiasm while the regulators acknowledge the need for a paradigm shift in traffic policies. The book \u003ci\u003eBehavioral Finance for Private Banking\u003c\/i\u003e is the Tesla of the Private Banking world. For decades, the industry grapples with the 'gut feel' to advise, using fear and greed to instigate regrettable decisions. The discipline offers predictive power to transform the entire wealth industry. In this new world, the financial auto-pilot is personalized to give the client a safe, enjoyable and cost-efficient ride.\" \u003cb\u003e —Michael Gerber,\u003c\/b\u003e CEO, 360F (Singapore) Pte Ltd\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988800323813,"sku":"NP9781119453703","price":70.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119453703.jpg?v=1761781638","url":"https:\/\/k12savings.com\/products\/behavioral-finance-for-private-banking-isbn-9781119453703","provider":"K12savings","version":"1.0","type":"link"}