Welcome to the final podcast of the Emotions and Money series, where Maya and Paul Nixon, head of Behavioural Finance at Momentum, delve into the concept of the Money Fingerprint.
During the COVID-19 period, South African investors destroyed over R650 million in value by changing their investment strategy ‒ switching between investments in response to market stimuli. What were the reasons behind this behaviour, which researchers have dubbed “behaviour tax”?
In an effort to help financial advisers answer this question, and to facilitate more meaningful discussions with their clients about their money behaviour, Momentum Investments have developed a psychometric assessment that they have called the “Money Fingerprint”.
The Money Fingerprint isn’t just another run-of-the-mill personality test. It’s a sophisticated diagnostic tool, created in collaboration with Pretoria University, that weaves together the core themes explored throughout this podcast series. These include your risk attitudes, money attitudes, and personality traits.
The assessment is designed to identify people’s risk preferences, and reveal their likely behaviour. Are you a lavish spender who struggles to save for the future? Or are you a dedicated saver, constantly denying yourself any “guilty pleasures” today so that you can provide for tomorrow?
By interrogating their clients’ money attitudes and even their innate personality, the assessment will help advisers to develop strategies to manage or even eliminate the investor behaviour tax.
Emotions and Money is a six-part podcast series in partnership with Momentum Investments, in which we unpack the psychology behind our investment decisions and how our emotions could be sabotaging our financial outcomes.