Certificate in Financial Psychology & Behavioral Finance Course

Why select this training course?

Psychology and behavioral finance involve studying psychology’s great influences and impacts on the practitioner’s behavior. This Rcademy course will give the basis to practice and develop the required skills to analyze a wide range of decision-making processes, biases, and information processing mistakes that go into a practitioner’s mind before they can make a financial decision. The course will give most of the main principles of the psychology of investors, including mental accounting, prospect theory, financial therapy, regret theory, heuristics, retirement planning, personality traits, loss aversion, bounded rationality, and emotions in investments. With a good understanding of these principles, delegates can apply the learned theories to making their own decisions or helping others make better decisions while investing.

Why is there a need to study behavioral finance?

The study of behavioral finance is important because it recognizes that people’s financial decisions are not always based on logic. It also tries to figure out how people’s emotions and thoughts affect financial decisions. This knowledge can help people make better decisions about their money and help financial professionals develop better products and strategies that take these behavioral factors into account. Also, behavioral finance can help make policies that aim to make markets more efficient and promote financial stability.

What are the different biases that affect investing?

Different biases affecting investment are overconfidence, anchoring bias, confirmation bias, herding bias, hindsight bias, etc.

The Certificate in Financial Psychology & Behavioral Finance Training Course by Rcademy will enable participants to do evidence-based financial planning, understand the motivation for investing, understand the roles of emotions in decision making, asset allocation with inattention bias or inertia, and fully apply these skills to their financial decisions. The course is designed and prepared with great detail to ensure that all the participants gain meaningful and applicable skills after undertaking it. It will also equip the participants with competent skills that will put them above others in the modern, fast-paced finance world where every skill is highly rewarded. Everyone should understand how finances work and, for the matter of this course, how psychology and behavior impact their investment decisions. Therefore, this course is ideal for everyone who wants to make better investment decisions without using emotions while understanding their decisions.

Who should attend?

The Certificate in Financial Psychology & Behavioral Finance Training Course by Rcademy will greatly benefit the following professionals to be well-rounded in their decision-making process:

• Equity managers
• Sales personnel
• Fixed income managers
• Financial planners
• Professional advisors
• Financial psychologists
• Other interested professionals

What are the course objectives?

The following are the main objectives of the Certificate in Financial Psychology & Behavioral Finance Training Course by Rcademy:

• Understand what psychology and behavioral finance entail, how it is unique from modern finance, and how it affects financial markets
• Develop a studying culture for the herding bias and other influences that come from social interactions and how they distort decisions
• Discover the most relevant self-deception biases, how they come to be, and the potential step that can be taken to handle them
• Understand the existing common emotional and psychological biases and how they affect decision-making
• Apply the learned skills to identify loss aversion bias
• Discover the effects of cognitive bias and determine their roots
• Differentiate themselves as skilled and voice of authority in financial psychology, behavioral psychology, and financial therapy
• Develop the necessary skills to work with families and married people around financial issues
• Improve their performances concerning client acquisition, satisfaction, and services
• Understand and identify negative behavioral beliefs that might adversely impact themselves or their clients
• Improve their financial health, develop a good relationship with money, and make better financial decisions

How will this course be presented?

All Rcademy courses are thoroughly designed, prepared, and presented to ensure the participants benefit maximally from them  In this regard, all the courses will be presented through lectures, practical exercises, case studies, videos, and notes
All the facilitators of all courses, including this one, are highly specialized experts in teaching and their fields

What are the topics covered in this course?

Module 1: Introduction to Psychological and Behavioral Finance

• Objectives discussions
• Setting goals
• Reasoning
  – Reflective reasoning
  – Reflexive reasoning
• Reasoning exercises
• Decision-making biases
• Cognitive reflection exercise

Module 2: Cognitive Bias

• Overview of the bias
• Hindsight bias
• The 2008 financial crisis and How it came to Be
• Case study:
  – Hindsight bias
• International news
• Self-attribution bias
  – Case study: self-attribution
• Confirmation bias
  – Example: confirmation bias
• Protection against confirmation bias
• Finding the right patterns
• Representative bias
  – Case study
  – Protection against it

Module 3: Other Cognitive Bias

• Clustering illusion
  – Definition
  – Protection
• Likelihood of an event happening guessing
  – Example
• Investment strategies
• Anchoring bias
  – Case study: 2 questions
  – Protection against this bias
• Status-quo bias
  – Definition
  – Protection against it
  – Case study
• Framing bias
  – Definition
  – Case study
  – Word order and its effects

Module 4: Social Bias

• Herding bias
  – Definition
  – Case study
  – Exercise
• Gender biases
  – Definition
  – Case study
  – Protection against it
• Behavioral biases
  – Definition
  – Case study
  – Exercise

Module 5: Emotional Bias

• The endowment effects
  – Definition
  – Case study
  – Protection against it
• The narrative fallacy
  – Definition
  – Case study
  – Protection against it
• Discussion exercise: group
• The disposition effects
  – Case study
• Lottery exercise: 3 questions
• Loss aversion and prospects

Module 6: Self-Deception Biases

• Optimism bias
  – Case study
  – Protection against it
• Overconfidence bias
  – Exercise: group discussions
• The illusion of knowledge and control
  – Definition
  – Case study
  – Exercise
• Interactive session
• Behavioral finance biases overview

Module 7: Family Finance Psychology

• Introduction
• Goal setting
• Communication and understanding
• Spending, investing, saving, and donating
• Seeking professional help
• Allowance
  – Children allowances

Module 8: Applied Behavioral Finance

• Behavioral finance advanced understanding
• Investing
• Client communication skills
• Principles and techniques used in behavioral finance