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You can’t necessarily trust your own instincts
You probably think you are sensible and can make rational decisions. But you may not realise that you are influenced by a number of behavioural biases which can result in poor decision making.
Poor numeracy skills and lack of understanding will have a negative influence on your decision making. A good adviser will help you overcome your behavioural biases.
Some of the most common behavioural biases are as follows:
- Overconfidence – You may overestimate your ability to make the right decisions
- Information bias – Watch out for fake or misleading news
- Loss aversion – Fear about short term losses may result in you being over cautious
- Hyperbolic discounting – You should avoid short-termism and take a longer-term view
By presenting facts and figures in a clear and concise way and making sure you understand the importance of taking a long-term view of your retirement needs, a good adviser will help you avoid making mistakes resulting from your behavioural biases.
If you want to make the most of pension freedoms you should start planning ahead and make sure your financial affairs are in good shape in the years running up to retirement.William Burrows
Offices in London and Northampton
Call: 07730 435 657
Better Retirement Group Ltd
|400 Pavilion Drive
| 68 Lombard St