Mesirow Advisor Champions Behavioral Finance for Smarter Investing

Chicago, IL – In a financial landscape often dominated by numbers and algorithms, a growing number of advisors are turning to the insights of behavioral psychology to help clients make smarter investment decisions. Tiffany Irving, a Certified Financial Planner and Certified Exit Planning Advisor with Mesirow, is at the forefront of this movement, advocating for a holistic approach to wealth management that acknowledges the powerful role of emotions and cognitive biases.

Irving, a frequent guest on WGN Radio’s “Your Money Matters,” believes that traditional financial planning often falls short by assuming clients will act rationally. “We’re human,” she explains. “We all have blind spots and emotional triggers that can lead to poor financial choices. It’s not enough to simply present a plan; you need to understand why people make the decisions they do.”

Beyond Rationality: The Rise of Behavioral Finance

For decades, economic theory operated under the assumption of “rational actors”—individuals making logical decisions based on available information. However, the field of behavioral finance, which emerged in the late 20th and early 21st centuries, challenged this notion. By integrating insights from psychology, neuroscience, and economics, behavioral finance recognizes that emotions, cognitive biases, and social influences play a significant role in financial behavior.

“Traditional finance focuses on what people should do, while behavioral finance focuses on why they don’t,” explains one financial industry analyst, speaking on background. “It acknowledges that we’re prone to systematic errors in thinking – like loss aversion, confirmation bias, and overconfidence – that can derail even the most well-intentioned financial plans.”

Mesirow’s Holistic Approach

Irving’s approach at Mesirow incorporates these insights by focusing on understanding clients’ “money scripts”—the deeply ingrained beliefs and attitudes about money formed in childhood. By uncovering these underlying beliefs, advisors can help clients identify and overcome potentially harmful biases.

“It's about more than just investments and returns,” says Irving. “It's about helping clients define what truly matters to them and aligning their financial goals with their values. When you understand their motivations and fears, you can build a plan that’s not just financially sound, but also emotionally resonant.”

Cognitive Biases in Action

Several common cognitive biases often impact investment decisions. Loss aversion, for example, can lead investors to hold onto losing stocks for too long, hoping to recoup their losses, while quickly selling winning stocks to lock in profits. Confirmation bias can lead investors to seek out information that confirms their existing beliefs, ignoring contradictory evidence. And overconfidence can lead investors to overestimate their ability to predict market movements, leading to excessive risk-taking.

“One client I worked with was a successful entrepreneur who had a strong belief in his own abilities,” recalls Irving. “He was convinced he could ‘time the market’ and consistently beat the averages. It took a lot of patient conversation to help him understand the risks involved and the importance of diversification.”

Financial Gratitude & Positive Mindsets

Irving also emphasizes the importance of cultivating a positive money mindset and practicing financial gratitude. “It’s easy to focus on what we don’t have, but taking the time to appreciate what we do have can have a powerful impact on our financial well-being,” she says. “When you’re grateful for what you have, you’re less likely to fall into the trap of endless consumerism and more likely to make thoughtful, long-term financial decisions.”

Practicing gratitude can curb overspending and encourage better saving habits. It allows individuals to appreciate the abundance in their lives instead of constantly wanting more. This mindset shift promotes mindful spending and sets the stage for achieving financial goals.

The Power of Personalized Planning

While behavioral finance is gaining traction across the financial industry, implementing it effectively requires a personalized approach. Generic advice simply won’t cut it. Advisors need to take the time to understand each client’s unique circumstances, values, and biases.

“It's about building a relationship based on trust and empathy,” says one industry observer. “Clients need to feel comfortable sharing their fears and vulnerabilities. Only then can advisors truly help them make sound financial decisions.”

WGN Radio & Reaching a Wider Audience

Irving’s frequent appearances on WGN Radio’s “Your Money Matters” have allowed her to reach a broader audience with her message. The program, hosted by Jon Hansen, attracts a diverse listenership interested in personal finance and wealth management. According to recent ratings data, WGN Radio reaches over 250,000 listeners.

“Jon is great at breaking down complex financial topics in a way that’s easy to understand,” says Irving. “It’s a platform that allows me to share practical advice and encourage people to take control of their financial futures.”

The Future of Financial Advice

As the field of behavioral finance continues to evolve, it’s likely to play an increasingly important role in financial advising. Technological advancements, such as artificial intelligence and machine learning, are also poised to revolutionize the industry by providing personalized financial planning tools and predictive analytics.

“The future of financial advice is not just about crunching numbers,” concludes Irving. “It’s about understanding the human element and helping clients navigate the emotional complexities of money.” It’s about building long-term relationships based on trust and providing guidance that’s both financially sound and emotionally resonant. By acknowledging our inherent biases and embracing a more holistic approach, we can all make smarter financial decisions and achieve a more secure financial future.