There's something advisers can learn from retail. And that may come as a surprise to you.
Every day, consumers are subjected to a masterclass in engineered urgency. Whether it's the flight operator’s message that there’s only ‘five seats left’, the e-commerce giant with its flashing 'Buy now' button, or a countdown ticking down the seconds on a ‘limited-time’ offer – the goal is the same.
These tactics create scarcity and a palpable sense of FOMO (the fear of missing out), which temporarily overrides rational consideration.
This constant retail theatre – as behavioural finance expert and Head of Oxford Risk, Greg Davies, and Emmy award-winning stylist, David Zyla, called it on series two of the Money:Mindshift podcast – is a powerful metaphor for the emotional performance playing out in the financial markets.
Prices flash red and green, headlines scream immediate action, and investors are nudged to act fast. And often emotionally.
How market noise creates a sense of urgency
Consider the recurring waves of market enthusiasm that captures headlines and investor attention. Whether it's a booming sector, a hyped-up company, or a sudden surge in a local market, the narrative often centres on explosive growth and urgent opportunity.
Advisers frequently tell me that clients feel anxious or overwhelmed by news cycles that amplify valuations and promise outsized returns. The underlying concern (that the excitement may outpace reality and trigger broader instability) is valid. Yet, when we step back, we see that this frenzy is simply another iteration of market noise.
The investing market operates in a constant state of engineered urgency. There’s an ambient, persistent pressure – a psychological nudge, almost – to buy now because the price will be different in five minutes.
This environment is specifically designed to prey on our innate behavioural biases. As an adviser, your key value here is emotional management.
Mastering the behavioural traps of spending
As an adviser, your primary role transcends basic portfolio management. You're also managing humans.
The financial world, much like high-pressure sales environments, is often designed to separate people from their money through emotional manipulation. Understanding this underlying mechanism is the first step to neutralising it.
The strategies of commercial urgency perfectly illustrate the common behavioural traps investors succumb to when market volatility rises:
- Anchoring: clients fixate on past highs or previous stock prices, making current corrections feel like an existential loss, regardless of future prospects.
- Scarcity and urgency: the commercial slogan 'buy now or miss out' morphs into 'invest now or lose the rally' – or conversely, 'sell now before it’s too late' during a downturn. This is a powerful trigger for panic selling or impulsive buying.
- Present bias/instant gratification: the desire for emotional gratification today (the relief of 'doing something' or the excitement of a quick return) overshadows the long-term financial consequences that will arrive tomorrow. This is the financial equivalent of valuing immediate, fleeting excitement over planned, sustained benefit.
The antidote is preparation and structure
The most effective way to help clients navigate market noise is to adopt a strategic approach focused on preparation and pre-commitment.
You must help clients design systems that makes good behaviour the default, rather than relying on the impossible task of resisting emotion. Here's my top three tips to help with that:
1. Define the 'buy list'
Before committing to any purchase, a consumer should know what they really need. Similarly, you should help your clients clearly define their long-term goals before volatility strikes. What is the money for? Education? Retirement income? A legacy?
By focusing the conversation on these personal objectives, you anchor the client’s decision-making to their long-term purpose, not the market’s temporary performance. This pre-commitment softens the emotional sting of volatility.
2. Build 'pause points'
Impulse is the enemy of sound decisions. Just as a consumer might be advised to 'sleep on it,' encourage your clients to build deliberative slowness into their financial choices. This may involve committing to a 24-hour waiting period before any decision-making, or mandating a call with you as a trusted sounding board.
The act of pausing gives the rational brain the necessary space to re-engage and challenge the initial emotional impulse.
3. Create an ‘if-then’ plan
Emotional resilience isn’t innate, it’s rehearsed. Work with clients to create an 'if-then' plan. Say: 'If the market drops by 10%, then we will…’
By role-playing responses to common market scenarios, you demystify uncertainty and replace panic with a predefined, rational response. This approach reinforces their trust in the established financial plan, elevating your role to that of a behavioural coach.
The Money:Mindshift podcast
Tune into our podcast where author, financial wellbeing pro and host, Dr. Tom, chats with experts about shifting your financial perspective.
Elevate your value by becoming a human-centric adviser
The markets are an ever-present theatre, constantly broadcasting signals of urgency and potential regret to trip your client up.
The most successful advisers aren’t those who attempt to predict when the next 'bubble' will burst, or the next rally will begin. They’re the ones who help their clients write a better script – one founded on defined goals, robust habits, and emotional resilience.
This is about providing emotional planning, not just financial planning – and it’s exactly what human-centric advisers do. For more information, check out our CPD-accredited human-centric webinars on our Insights hub.
The advisers whose clients stay calm won't be those who predicted the plot. They'll be the ones who helped them write their own.