Invest Like the Best with Patrick O'Shaughnessy Dan Egan – Designing Better Decisions - [Invest Like the Best, EP.18]
Jan 3, 2017
Dan Egan, Managing Director of Behavioral Finance at Betterment, discusses the intersection of behavioral science and investing. He explores how sci-fi literature has influenced his thinking on social conventions and decision-making. Dan reveals innovative strategies like Tax Impact Preview that significantly improve investor behavior and reduce poor trading decisions. He shares his passion for designing systems that help people navigate financial challenges, advocating for the use of nudges instead of bans to enhance investment choices.
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Show Real-Time Tax Consequences
- Show real-time, concrete costs (like tax impact) before customers execute portfolio changes.
- Make the display mandatory after testing if it reduces harmful behavior without blocking needed withdrawals.
Tiny Design Tweaks Change Behavior
- Small design choices (colors, labels, benchmarks) trigger big emotional reactions and decisions.
- Deliver education surgically at the exact decision moment instead of generic, untimed content.
Target Messages To Active, Stressed Users
- Avoid broad preemptive outreach during market stress; instead target customers who log in during the event.
- Use context-sensitive messages that reassure and praise good behavior to reduce knee-jerk reactions.
