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Finliti Delivers Personalized Financial Insights Using the Power of Psychometrics

Finliti | Jennifer Schell and Dr. Stefano Di Domenico | Oct 13, 2021

Finliti delivers personalized financial insights - Finliti Delivers Personalized Financial Insights Using the Power of Psychometrics

Harnessing information and channelling its energy to improve people’s financial activities is the very essence of FinTech. The promise is to thrust traditional financial services—banking, insurance, and investment management—into cyberspace where they can be reimagined and elaborated by mobile software to add both capability and fluidity to people’s lives. This frontier of possibilities also brings new challenges to the forefront: With more people carrying their investment portfolios on their mobile devices, FinTech is asked to deliver high-quality, customized financial guidance wherever and whenever people want it.

Finliti is ready to meet this challenge. Our goal is to engage with investors in the ways that are most personally meaningful and helpful for them. We believe that investing should be as fun and immersive or as serious and disciplined as investors desire. We believe in financial inclusion—that every investor, no matter their experience or the size of their portfolio, deserves access to personalized financial advice. And most of all, we believe that all investors deserve the opportunity to earn good returns and meet their financial objectives.

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This is why we developed the Finliti Investor Profile Indicator (FIPI), a rigorously developed psychometric assessment and interactive feedback platform that helps investors understand how they allocate attention, make decisions, and react to important market events. The FIPI was developed by starting with the recognition that each investor is unique.

We’ve all heard it before: Some investors are more risk averse than others. True! But have you ever pondered the fact that some investors are more intellectually curious and enthusiastic than others? That some investors more readily defer to the advice of others? And that some investors are dangerously overconfident? More to the point: Did you know that these investor characteristics are as important as risk aversion? These are real emotional and behavioral tendencies that define the investor experience. For too long, they have been difficult to measure and frequently overlooked. Until now... The FIPI unlocks investors’ self-knowledge and transforms those self-insights into a more optimal investing experience and motivation for long-term success.

The FIPI is the culmination of considerable research and development. It was developed using a painstaking, “bottom-up” approach that probed over 250 different beliefs, preferences, emotional experiences, and behavioral tendencies that are common to self-directed investors. From this long list, we distilled four personality traits using advanced psychometric tools: Zeal, Inhibition, Conventionality, and Swag. These traits can be used to comprehensively describe the psychological individuality of investors.

  • Zealous investors tend to be enthusiastic and can become overly excited and sometimes even carried away by new opportunities;
  • Inhibited investors tend to be risk-averse, easily lose confidence, and often feel intimidated by the stock market;
  • Conventional investors more readily follow the advice of others, they trust “the experts”;
  • Swaggy investors tend to believe they know more about investing than they actually do and that they are immune to experiencing negative financial events.

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These FIPI traits characterize the psychological landscape of self-directed investors. Our research shows that the FIPI traits are reliably related to key demographic variables like age and level of education, differentially related to economic and financial knowledge, and predict financial behaviors and consequential outcomes like the amount of trades that investors execute, their levels of decision paralysis, and their degree of impulsive decision making. We presented some of this research at the 7th Biennial Meeting of the Association for Research in Personality, which took place in June, 2021.

Curious? Try our Discovery Survey for FREE! It’s a miniature FIPI, powered by the same psychometric insights but delivered in abbreviated form. It will give you a broad overview of your investing personality that is equal parts informative and playful.

The complete FIPI feedback expands on the micro-version.  The feedback is longer, more detailed, and offers many actionable insights. It is reference material that - with the passage of time - may aid in the development of deeper self-understanding each time it is read anew. It provides an objective viewpoint from which investors can learn about their strengths, identify their blind spots, and evaluate the way they make investment-related decisions.

The goal isn’t to change investors’ personalities. Rather, the purpose of FIPI’s feedback is to help investors become more mindful of their emotional tendencies so that they can more easily stay focused and rationally pursue their investment goals. For example, Zealous investors are reminded about their tendencies to bullishly rush into new positions; Inhibited investors are reminded that risks may be necessary to meet their objectives; Conventional investors are encouraged to crystallize their own opinions so that they can hold their positions with more conviction; and Swaggy investors are encouraged to learn. The feedback is personal. The platform is interactive. The insights are real.

Investors want high-quality, personalized insight and they want to be able to access it 24/7. The power of psychometrics can be harnessed to deliver this more optimal experience. So take a moment and give our Discovery Survey a try.

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About the Authors

Jennifer Schell

Jennifer Schell is the founder and CEO of Finliti that she built to help investors make informed and impactful investment decisions to enrich their lives by achieving their financial goals. Her career spans over fifteen years across Canada’s major financial institutions, where she’s been passionate about wealth management and helping her clients align effective stock market strategies with their core values. (LinkedIn)

Dr. Stefano Di Domenico

Dr. Di Domenico is an Assistant Professor at the University of Toronto Scarborough, where he teaches personality and neuroscience. He has published dozens of articles, advancing the modern understanding of motivation, personality, and decision making. His current research focus is behavioral finance and FinTech. He serves on Finliti’s advisory board.  (LinkedIn)

 


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This article is featured in NCFA's digital magazine, Fintech Confidential (Issue 4 Oct 2021). Click to read the latest thought leadership, insights and trends about Fintech in Canada:

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