Nonfinancial Investment Considerations

What this video covers

• Why ESG, socially responsible investing (SRI), and faith-based restrictions are always client-driven, never adviser-imposed, and how fiduciary duty still applies when values reduce diversification
• Why accredited investor status (income greater than $200K or net worth greater than $1M excluding primary residence) opens legal access to private placements but does not override experience-based suitability
• How loss aversion creates the disposition effect: selling winners too quickly and holding losers too long because losses feel roughly twice as painful as equivalent gains
• Why anchoring bias locks clients to purchase price rather than current fundamentals, and how confirmation bias and herding reinforce bad entry and exit timing
• How mental accounting ignores fungibility, with real exam setups like a client holding 1% savings while carrying 22% annual percentage rate (APR) credit card debt
• The adviser's fiduciary duty to educate rather than accommodate recency bias, status quo bias, and other irrational client behaviors
• Why beneficiary updates are almost always the first required action after major life events (birth, marriage, divorce, death, inheritance, retirement)