This is called familiarity bias, the place merchandise are really helpful as a result of they’re identified to the monetary planner though they might not ship the most effective consequence.
The research, performed by HEC Montreal, additionally reveals that planners usually tend to suggest merchandise that the shopper has requested about.
They might additionally issue within the gender of shoppers when this isn’t an essential consideration. For instance, planners are about 4% much less prone to suggest mutual funds to feminine shoppers as in comparison with male shoppers.
At all times dangerous?
Nonetheless, the research doesn’t recommend that planners needs to be attempting to remove bias and a suggestion influenced by bias should still be the best choice in some instances.
“This analysis is a reminder that every one people are susceptible to bias, even monetary planners,” says Joan Yudelson, Govt Director, FP Canada Analysis Basis. “It is not essentially a damaging factor, but it surely does imply planners ought to stay vigilant. By being conscious of potential biases, they may also help be certain that the suggestions they’re making are really of their shoppers’ greatest pursuits.”