Ryan Paterson: Using behavioural finance to take control of investments

Mitigating cognitive and emotional biases

clock • 4 min read

Behavioural finance offers the prospect of a better understanding of financial markets as well as scope for advisers and their clients to make better investment decisions, explains Ryan Paterson

"The investor's chief problem - and even his worst enemy - is likely to be himself." Benjamin Graham Traditional finance is based on rational and logical theories, such as the capital asset pricing model (a model that describes the relationship between market risk and expected return for assets) and the efficient market hypothesis (a theory in financial economics that states an asset's price fully reflects all available information). These theories assume investors are rational, which means they make decisions that maximise utility and revise their expectations in a manner consiste...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

AI is fast turning into an asset allocation story, not just a technology story

AI is fast turning into an asset allocation story, not just a technology story

'What is being challenged is not whether AI matters, but who captures the economics'

Lisa Wang
clock 07 August 2026 • 5 min read
Darius McDermott: Have megatrends changed the game?

Darius McDermott: Have megatrends changed the game?

'Disruptive forces are at work in the global economy'

Darius McDermott
clock 06 August 2026 • 5 min read
Technology cited as main barrier to private market access for advisers

Technology cited as main barrier to private market access for advisers

Follows Oliver Wyman’s and Clearstream’s private markets whitepaper

Sophia Panayi
clock 04 August 2026 • 3 min read