Topley is a speaker at the marcus evans Private Wealth Management Summit 2018, taking place in Las Vegas, Nevada, March 15-16.

1. Taking Emotions Out of
the Investment Process
Interview with: Matt Topley, Chief
Investment Officer, Fortis Wealth
“Human decisions are made with 80
percent emotion and 20 percent logic.
In finance, that is higher at 90 percent.
Unfortunately, when people follow their
natural instincts, they tend to apply
faulty reasoning to investing. Ego and
emotion are the twin enemies of sound
investing and must be kept out of the
investment process. That is becoming
harder today as there is an inherent
belief that a complicated investment
landscape requires complicated solu-
tions. Family offices are increasingly
offering their clients complex products
to differentiate themselves in the
market, but that means they are
making emotion-free investment
decision-making even more difficult,”
according to Matt Topley, Chief Invest-
ment Officer, Fortis Wealth.
Topley is a speaker at the marcus
evans Private Wealth Management
Summit 2018, taking place in Las
Vegas, Nevada, March 15-16.
What do CIOs and wealth managers
need to know about behavioral
science?
In today’s 24-hour news cycle, we are
constantly bombarded with negative
information that we think will affect the
markets. That skews decision-making.
Secondly, our biggest enemy is our ego.
The ability to evaluate one’s own ability
is the most important skill of all, and
ego makes it difficult every step of the
way.
How can family offices ensure their
clients’ investment decisions are
not influenced by emotions?
They should develop an investment
process that removes human emotions
as much as possible. They cannot be
completely removed, but technology can
help them set up an investment model
that removes emotions from a lot of the
decision-making.
Factor-based investing is gaining in
popularity. It is based on academic
research, completely removing emotions
from the stock picking process. There is
a massive move towards passive
investing, although that does not
necessarily remove emotions. People
can still make the same emotional
mistakes around indexing as with stock
picking.
Success is more about having a well-
diversified portfolio set up for the long
run, making a plan and sticking to it,
than about picking the next Apple.
Family offices are becoming their own
private equity firm or hedge fund, and
there is good and bad side to that. They
are seeking complexity that is not
needed. They believe they have to offer
complex products to be stand out, but
that is resulting in even more emotion-
based decisions. They can still differen-
tiate themselves through real estate,
private investments, but in the public
markets their focus should be on
keeping fees low and tax efficiency high.
What are the most common miscon-
ceptions or traps that CIOs fall into?
How can they be avoided?
The top biases are the following. The
“recency bias”, where investors evaluate
portfolios based on recent results,
making incorrect conclusions that lead
to emotional, incorrect decisions. The
“illusion of skill” that causes people to
overestimate their skills and underesti-
mate their negative skills. Thirdly, the
“halo effect”, where we believe that
someone with a likeable personality or
desirable trait can do no wrong. It may
seem shocking but hero worshiping on
Wall Street is quite common. Investing
is not an IQ game. It is a psychology
game.
How can family offices prepare their
clients or train them to avoid such
traps?
There are good psychology tests
available to identify the investment
personality type of the family. They can
identify their thought process and
mistaken beliefs, and review it with the
family.
They should do this in a bull market like
this, before the next recession.
Investing
is not an
IQ game.
It is a
psychology
game.

2. The Investment Network –
marcus evans Summits group
delivers peer-to-peer information
on strategic matters, professional
t r e n d s a n d b r e a k t h r o u g h
innovations.
Please note that the Summit is a
closed business event and the
number of participants strictly
limited.
About the Private Wealth Management Summit 2018
The 22nd Private Wealth Management Summit is the premium forum bringing
leaders from America’s leading single and multi-family offices and service providers
together. The Summit offers service providers and executives from single and multi-
family offices an intimate environment for a focused discussion of key new drivers
shaping the future of the industry. Taking place at The Venetian, Las Vegas,
Nevada, March 15-16, the Summit includes presentations on producing income
while reducing risk, the impact of robo-advisors, sustaining wealth throughout
generations, alternative investment strategies and socially responsible investing.
www.privatewealthsummit.com
About marcus evans Summits
marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss
strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to
individually tailor their schedules of keynote presentations, case studies, roundtables and one-on-one business meetings.
For more information, please visit: www.marcusevans.com
Upcoming Events
Elite Summit (Europe) - www.elitesummit.com
North America Pensions Summit - http://napensions.marcusevans-summits.com
Private Wealth Management APAC Summit - www.pwmsummit.com
To view the web version of this interview, please click here:
http://events.marcusevans-events.com/pwm2018-matt-topley
Contact
Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division
Tel: + 357 22 849 313
Email: press@marcusevanscy.com
For more information please send an email to press@marcusevanscy.com
All rights reserved. The above content may be republished or reproduced. Kindly
inform us by sending an email to press@marcusevanscy.com