The up-and-coming field of behavioural finance combines psychology and economics to help people make more rational financial decisions. In an interview with BusinessLine, Sarah Newcomb, Behavioural Economist, Morningstar Inc, explains how financial advisors can use these tweaks or ‘nudges’ to make savers savvier. Excerpts:
Can you take us through how behavioural finance works?
I work in the intersection of psychology and financial decision-making, so I’m very interested how we think and feel about money that affects the choices we make. A lot of behavioural finance focuses on nudges or small tweaks that we can make to our choice architecture that help us make decisions that align with our long-term goals.
