Integrating Behavioral Science Principles in the Training Curriculum for 20 000+ Financial Planners in Canada

Case Study

Context

North American households show an increasing pattern of unsustainable financial habits. Higher property prices have made borrowing a normality and this, in turn, has normalized retail-led debt, creating  a culture-shift toward risk-aversion in investing despite risk-seeking in borrowing. In an effort to shift these trends here in Canada, The Decision Lab was approached by FP Canada to create a curriculum for all 20 000+ financial planners in Canada. The curriculum applies new skills in the principles of human behavior to address cognitive biases and heuristics in financial planning interactions and ultimately improve financial decision-making outcomes for clients.

Project

The focus of this project was to develop a training curriculum for 20 000+ financial planners in Canada. The curricula applies new skills in the principles of human behavior to address cognitive biases and heuristics in financial planning interactions to improve financial decision-making outcomes for clients.

Decision-Making Model

It is easier for people to make good decisions and take positive actions if we first identify and address barriers that may get in their way – especially if these barriers are present before the financial decision process even begins. For this reason, applications of behavioral economics focus on identifying the barriers that reduce desired behaviors as well as the drivers of undesired behaviors. These barriers must be unraveled, then addressed with solutions that fulfill specific criteria. In most cases, we aim for solutions that follow the EAST framework of behavior change:

Easy – Attractive – Social – Timely

Past example of a behavioral interaction model

Approach

Our approach focused on creating an educational experience for the planners that not only taught them how to better understand and shift their clients’ decisions but provided them with introspective guidance on their own behaviors with clients. We focused on several high-level target behaviors and identified the strongest sources of behavioral science applications that could shift behaviors in these contexts. The end results was a curriculum that all financial planners in Canada will need to study in order to become certified financial planners (CFPs).

Impact

  • 20 000 Canadian Financial Planners will receive our behavioral science-informed curriculum. 
  • 10M Canadians use financial service professionals
  • 39% of Canadians are unsure about their long-term financial goals
  • Our research showed that about 60% of this lack of planning relates directly to behavioral issues

Our intervention can directly affect the financial health of over 2.34M (60% of the 3.9M without plans) Canadians

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