The future of financial advice: Putting behaviour first 

Paul Nixon, Head of Behavioural Finance at Momentum Investments, chats with Sonja Steyn, Strategic Head of Wealth Management and Financial Planning and Advice at Momentum, about why behaviourally informed advice is shaping the future of financial planning. 

Paul Nixon (PN): Sonja, behavioural finance is becoming a big deal in financial planning. Why do you think advice based on human behaviour is the way forward? 

Sonja Steyn (SS): A lot of people believe that their financial situation is about external factors or how well they budget. But the reality is, our behaviour has a significant impact on our financial outcomes. We are emotional beings, and sometimes those emotions drive us to make decisions that are not in line with our long-term goals. This is where behaviourally informed advice comes in. It helps people uncover their financial habits and blind spots, giving them the insights they need to make smarter choices and stay focused on what really matters to them. It is about empowering them to take control of their financial journey with confidence and clarity. 

PN: How is this different from traditional financial planning? 

Sonja Steyn (SS): Traditional financial planning tends to focus on the numbers, things like investment returns, risk tolerance, and asset allocation. While those factors are important, they do not always account for the emotional side of money. Behaviourally informed advice, on the other hand, takes a much more personal approach. It helps clients understand their own unique biases and relationship with money, so they can make smarter, more thoughtful decisions. It is all about personalising financial strategies to each person, not just crunching the numbers, but truly connecting with their goals and values. 

PN: What role does technology play in all of this? 

 
Sonja Steyn (SS): Technology is really changing the game! With AI-driven tools, real-time financial tracking, and behavioural insights, advisers can create financial plans that are truly personalised. These digital tools allow clients to see how their decisions affect their goals, which helps keep them engaged and motivated. The real beauty of it, though, is using technology to enhance the human connection. It is not about replacing personal advice but about using technology to make those connections even stronger and more meaningful. 

PN: You talk a lot about a more integrated approach to financial planning. What does that look like in practice? 

Sonja Steyn (SS): Good financial planning goes beyond just selling investment products, it is about understanding the whole picture of a client’s life. It is about managing risks, setting meaningful goals, and creating a plan that evolves alongside them. At Momentum, we take an integrated approach with a comprehensive advice framework that covers everything from wealth creation to retirement and legacy planning. Our goal is to help clients achieve financial security in a way that is not just sustainable, but also deeply meaningful to them and their future. 

PN: Markets go up and down, and emotions run high. How does behavioural finance help clients avoid emotional decision-making? 

Sonja Steyn (SS): It is a challenge many clients face. When the market takes a dip, fear can make people want to panic-sell, and when it is rising, they often feel the urge to chase returns. Behavioural finance helps clients recognise these emotional triggers before they lead to decisions they might regret. Advisers collaborate with clients to navigate these emotions through techniques like scenario planning and gentle behavioural nudges, helping them stay focused on their long-term goals. It is all about supporting clients to make thoughtful, well-informed decisions, even when emotions are running high. 

PN: Financial advisers also need to evolve. How are they being prepared for this new way of advising? 

Sonja Steyn (SS): To truly have influence in clients’ lives, advisers need a combination of technical expertise and an understanding of human behaviour. At Momentum, we are passionate about continuous learning, mentorship, and offering advanced designations like the Certified Behavioural Adviser™ (CBA™). This approach helps our advisers not just provide advice that makes sense financially, but also ensure it resonates with clients on a deeper level, empowering them to make decisions that align with their long-term goals and aspirations. 

PN: How does this approach benefit both clients and advisers in the long run? 

Sonja Steyn (SS): This approach brings real benefits for both clients and advisers in the long run. Clients receive advice that is personalised and speaks directly to their unique financial needs, giving them greater clarity and confidence about their financial future. They also gain valuable insights into their financial behaviours, empowering them to make better informed choices. For advisers, this approach strengthens relationships with clients, making their service stand out in a competitive market. By blending behavioural insights with technology, advisers can grow their business in a way that is both meaningful and sustainable, while also creating great advice experiences for their clients. 

PN: You often talk about ‘re-humanising’ financial planning. What do you mean by that? 

Sonja Steyn (SS): Money is not just about numbers; it is so much more personal than that. It is connected to our emotions, our experiences, and our dreams. When we talk about, we are re-humanising financial planning, we mean acknowledging that every client has their own unique financial journey. It is about building trust, making genuine connections, and developing strategies that align with what truly matters to them. At the end of the day, financial advice is not just about growing wealth; it is about helping people live their best lives and feel confident about their future. 

PN: Finally, what excites you most about the future of behaviourally informed advice? 
 

Sonja Steyn (SS): The future of behaviourally informed advice is incredibly exciting! We are seeing a real shift in how financial planning is approached. With the advances in behavioural science, technology, and the continuous development of advisers, we now have the opportunity to transform the way people interact with their finances. It is no longer just about making smart investments; it is about empowering people to reach financial success in a way that truly resonates with their unique goals and aspirations. The possibilities for meaningful change are endless, and that is what excites me most. 

To read Sonja’s full article, download the Sci-Fi report from Momentum Investments here: https://sls-fresco.momentum.co.za/files/documents/invest/updates-and-news/from-the-experts/general/sci-fi-report-2024.pdf 

Note

*This Q&A is based upon the featured article titled ‘The future of behaviourally informed advice’ in the latest Sci-Fi report from Momentum Investments with the help of ChatGPT. 

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