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July 2011 Commentary

The Psychology of Money 29th July 2011

Money Earlier this week I presented a short insight called the Psychology of Money at the 4N networking group in High Wycombe. The presentation is about our relationship with money and the way we make financial decisions. In it I use a series of questions to demonstrate how the short cuts we use to break down complex financial decisions can bring bias into our decision making.

The feedback I have had from these presentations has been very positive. People are interested in how we make decisions and how we can be influenced by the way information is presented to us.
Here is what Peter Cannon of Cannon Moorcroft said about it:

"As an Accountant in practice I have often puzzled why my clients are not more receptive to getting better returns on their deposits, Kathy's 4sight presentation on the Psychology of Money is a great insight on the right buttons to press." Peter Cannon, Cannon Moorcroft, High Wycombe

I first came across the topic of 'behavioural finance' in 2000 in a paper called Making actuaries less human: Lessons from Behavioural Finance by Nigel Taylor. I found this quite a revelation at the time and it sparked my interest in how we make financial decisions and the psychology behind it. When it came to choosing a topic for my MBA dissertation, I chose to carry out my own research in this field. This was in 2004 and at that point in time very little research had been done in the UK with financial consumers. Most of the research was US based and quite often used students as the research subjects. I sent my questionnaire to over 1000 investment customers and received back just under 400 responses. I went on to publish my research in the Journal of Financial Services Marketing in 2005 and also presented my findings at a number of conferences.

More recently I have joined the Behavioural Finance Working Group to keep up to date with the latest developments in the field. The group's annual conference was held at Cass Business School in April and was a very informative two days about the latest research.

So if you want to find out more about the Psychology of Money, here are the future dates to hear it at 4Networking:

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