AUGUST 2020: Starting Thoughts

Journal of Financial Planning: August 2020


Science of Behavior

I’m fascinated by how people tick. What makes people do certain things, take certain actions under certain circumstances? Psychology is the science of mind and behavior. Behavioral finance is the science of how psychology influences our financial decisions.

If you share my wonder of the human condition and are curious about why your clients think and act the way they do, you’ve likely read the foundational works of Daniel Kahneman (Thinking, Fast and Slow) and Richard Thaler and Cass Sunstein (Nudge). And as a financial planning practitioner, you need to take theory and understanding to the next level. How do you apply this knowledge to your work with clients? What are the practical solutions here?

Psychologist and behavioral finance expert Daniel Crosby has a pretty cool job. As the chief behavioral officer at Brinker Capital, he runs Brinker’s behavioral innovation lab, which exists to create those practical solutions. As Crosby writes in the cover story, his job is to “pluck learning from the ivory tower of academia and put it on the desks of financial advisers everywhere.”

With that in mind, he shares 22 behavioral interventions that can help you improve client outcomes. It’s a quick read packed with ideas you can implement today.

Following on the theme of behavioral finance, Commonwealth’s Nick Follett helps you and your clients understand how to make the best of the worst of times. In this column, Follett explores the emotional bias of overconfidence (when clients believe they know more than they do) and how fear of the unknown actually amplifies the value of good planning.

Behavioral finance is an exciting area of study brimming with continual new research, insights, and practical applications. To stay in tune with it, check out Crosby’s blog posts at, and the work of Jay Mooreland, CFP®, at And to keep up on the latest research in this space, access papers produced by the National Bureau of Economic Research’s Working Group on Behavioral Finance at

Carly Schulaka