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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Investor genetics - not so surprising

02 December 2009  |  3304 views  |  0

There's a new study out that says investor behavior is almost half determined by genetic factors. Twins who were raised apart were compared to twins raised together, in terms of their investing preferences.

This suggests to me that personality type preferences, and learning style preferences, which are both rooted in early childhood -- are at work in many forms of human behavior. And that this now includes investing behavior.

The way we want to take in information, the way we prefer to evaluate options and make decisions -- these are preferences that stay with us throughout life. We are not all cut from the same cloth.

This research totally makes sense to me, however there are few organizations that utilize this kind of information to really help their customers.

Sadly, "Know Your Client" is a form, not a philosophy.

The Finextra summary of this research is here.

Here's the study: Barnea, Amir, Cronqvist, Henrik and Siegel, Stephan, Nature or Nurture: What Determines Investor Behavior? (September 15, 2009). Available at SSRN: http://ssrn.com/abstract=1467088

Direct link to the full download (free) here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1467088

TagsRetail banking

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