Strategy

INTERVIEW: Behavioural Finance Luminary Wants To Bring Change Where It Counts

Tom Burroughes Group Editor London 31 October 2016

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A new UK-based business, launched by the former behavioural finance head of Barclays, aims to take insights from academia and turn them into actionable processes for wealth managers.

There are so many pressures on wealth managers to get a real feel for just how tolerant their clients are for risk that a strong understanding of behaviour is increasingly important. 

And with regulators cracking the whip to make sure clients are only put into services and products deemed “suitable”, being able to understand what makes clients tick and react to adverse or positive news is urgent. Market gyrations, meanwhile, create plenty of sobering lessons on how investors are not as rational or clear-headed about managing money as they would like to think.

The area of “behavioural finance” has come on leaps and bounds in recent years and Greg Davies, PhD, founder of London-based consultancy firm Centapse – which he has just launched – is a big reason why. Davies recently left Barclays, where he created then led the behavioural finance team for more than a decade. It is fair to say that if there was a discussion in the industry about this subject, there is a high chance Davies is at the table. The cutting-edge work he did in this area was often a proud point for Barclays, which sought to use the insights gained to glean the risk appetites and goals of clients.

Davies earned his doctorate in behavioural decision theory from Cambridge and he brings plenty of intellectual firepower to this area; he is also an associate fellow at Oxford’s Saïd Business School, a lecturer at Imperial College London, and author of Behavioral Investment Management. Among his other accomplishments, Davies created Open Outcry, a “reality opera” premiered in London in 2012, creating live performance from a functioning trading floor.
 

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