What Is Behavioral Financial Advice?
Behavioral Financial Advice (BFA) is the applied practice of behavioral finance—helping clients align their decisions with their values, goals, and behaviors. While behavioral finance explores how emotions, biases, and cognitive shortcuts shape money decisions, BFA is about action: giving advisors frameworks to guide client behavior in real-life financial situations.
At think2perform, we’ve trained advisors for over 20 years to move beyond theory and put behavioral financial advice into practice.
Why the Financial Services Industry Gets It Wrong
Most firms introduce behavioral finance as a bias-spotting exercise:
- “Your client is overconfident about a stock.”
- “You’re showing confirmation bias.”
This creates awareness but rarely changes outcomes. Worse, labeling clients as “biased” risks damaging trust. BFA is different. It provides tools to transform client awareness into behavior change, grounding advice in values and goals rather than abstract labels.
The Core of BFA: Moving Beyond Bias
Advisors who practice BFA succeed because they focus on behavior change:
- Framing through values: Instead of naming biases, connect decisions to values like family, health, or purpose.
- Anchoring on goals: Show how behaviors either support or derail stated goals.
- Using structured tools: The Alignment Model helps clients link values → goals → behaviors, creating a repeatable framework.
Tools That Power Behavioral Financial Advice
The Alignment Model
A simple but powerful framework:
- Identify values (who the client wants to be at their best).
- Translate values into goals.
- Align behaviors with those goals.
This creates a shared language to navigate emotional, high-stakes financial decisions.
The Values Exercise
An interactive discovery tool where clients rank their top values. With over 350,000 completions, the results consistently show that people prioritize family, health, happiness, and integrity far above money and wealth. Advisors using this tool uncover deeper motivations that reshape financial planning conversations.
Why Values Matter More Than Money
Think2perform research and field experience show clients consistently prioritize:
- Living a values-based life (family, purpose, relationships).
- Maintaining health.
- Achieving financial security.
Traditional advisors often stop at financial security. BFA-trained advisors integrate all three, helping clients live holistically aligned lives, while creating differentiation from commoditized, AI-driven money management.
Client Story: BFA in Action
A New England advisor used the Alignment Model with a longtime client. After multiple withdrawal requests for “camp renovations,” the advisor discovered the funds were actually being funneled into a crypto scam. By revisiting the client’s stated value—“I don’t want to be a gambler”—the advisor helped him recognize the misaligned behavior. The intervention saved hundreds of thousands of dollars and deepened client trust.
Why Advisors Need Behavioral Financial Advice
Some advisors say, “I take the emotion out of investing.” But emotion is physiological—you can’t remove it. BFA provides a way to acknowledge and redirect emotion, using values and goals to stabilize decisions.
As we often remind advisors: “Plans and pie charts don’t change lives—people do.”
Key Takeaways for Advisors
- Bias-spotting is not enough. BFA focuses on guiding behavior, not labeling biases.
- Anchor in values. Clients make better choices when advice connects to what matters most.
- Use tools. The Alignment Model and Values Exercise provide structure and repeatability.
- Differentiate from AI. Commoditized planning can’t replicate human, values-based advice.
FAQ
Q: What is Behavioral Financial Advice (BFA)?
A: It’s the applied side of behavioral finance, helping advisors guide client decisions through values, goals, and behaviors.
Q: How does BFA differ from behavioral finance?
A: Behavioral finance studies biases; BFA applies frameworks to change client behavior.
Q: What tools support BFA?
A: Think2perform’s Alignment Model and Values Exercise are core to applying BFA in client relationships.
Q: Why does BFA matter now?
A: Because AI can replicate technical planning, but it can’t replace human conversations about purpose, meaning, and values.
Conclusion
Behavioral Financial Advice (BFA) takes behavioral finance beyond theory. By anchoring in values, applying structured tools, and guiding client behavior, advisors deliver deeper impact and create lasting differentiation. In today’s marketplace, **BFA isn’t just an enhancement—it’s essential for the future of financial advice.
At think2p
