An understanding of behavioural biases in financial decision-making is essential to the client-adviser relationship in financial planning. The course begins with a review of the risk-return characteristics of different asset classes including human capital and the concept of market efficiency. Irrationality in decision-making will be introduced with an explanation of how cognitive and emotional biases influence individual investment decisions and market prices. This course equips financial planners to understand their own behavioural biases and help clients in dealing with their biases in making financial decisions. Students will use scenario-based learning tools to provide tailored financial advice to clients, taking into consideration their financial goals, demographic attributes, risk profiles, behavioural biases and financial literacy levels.
GSBS6517 Behavioural Finance and Client Relationships is a Financial Adviser Standards and Ethics Authority (FASEA) accredited Bridging Unit for inclusion in the Corporations (Relevant Providers Degrees' Qualifications and Course Standards) Determination 2018 Legislative Instrument.
Not currently offered.
This course replaces the following course(s): GSBS6150. Students who have successfully completed GSBS6150 are not eligible to enrol in GSBS6517.
On successful completion of the course students will be able to:
1. Explain the psychological underpinnings of the behaviour of individuals and their effect on investment decisions.
2. Critically analyse the interdependence between human capital and financial capital accumulation.
3. Apply behavioural finance insights to client education and engagement.
4. Provide tailored advice to clients from diverse risk profiles, demographic backgrounds and financial literacy levels.
5. Effectively communicate financial advice to clients both verbally and in writing.
The course will cover the following content:
- Market efficiency and rationality
- Prospect theory, framing, and mental accounting
- Heuristics, Overconfidence and Emotion
- Effect of behavioural biases on financial decisions
- Financial education for clients and de-biasing client behaviour
- Client engagement and relationship
- Understanding clients and providing tailored financial advice
Prior study meeting the RG146 requirement or equivalent
Written Assignment: Market Efficiency, Behvaioural Finance and Investment Decisions (30%)
Quiz: Client Engagement and Relationship (30%)
Case Study / Problem Based Learning: Case Study and Presentation (40%)
The University of Newcastle acknowledges the traditional custodians of the lands within our footprint areas: Awabakal, Darkinjung, Biripai, Worimi, Wonnarua, and Eora Nations. We also pay respect to the wisdom of our Elders past and present.