Part 3: The power of psychology in asset manager meetings

Pitch for different personalities: jigsaw puzzle of a head

This series has focused on an area of client interaction that many fund managers and their colleagues overlook.  We’ve observed and advised dozens of pitch and review meeting rehearsals and far too many focus exclusively on data and rational evidence.

Of course these are vital: but also necessary is an understanding of psychology and decision making on the other side of the table.  This component becomes more important as the number of strategies proliferates and competition intensifies.

Cognitive biases affect our reasoning and our decision-making at every turn, and even in the sterile environment created by, say, a public sector RFP process, there are unconscious leanings that you should be aware of.

In this last blog post we take a look at three final biases that asset managers should recognise and be prepared to accommodate in their client interactions.

Zero risk bias

We like control.  As a species we tend to favour maximum control of a minor risk than some control over a larger risk.  This preference for reducing a small risk to zero rather than a large risk to a medium one can often be seen in clients’ desires for simple or limited exposure fees or coverage.

It’s also why we tend to try to give a rigorous explanation of those aspects of our investment process that we can control and pay less attention to those larger factors that we can’t.

To assess how much your audience may be affected by zero risk bias it might be judicious to ask some questions to understand what their risk appetite really is before you enter detailed discussions.

Lay out different scenarios to understand where their tolerances lie: do they crave certainly? Are some decision makers (e.g. the lay trustee) more risk averse?


This bias is a common bias in investing that many professional investors recognise but surprisingly few will attempt to use it to their benefit.  It’s the tendency to take credit for positive outcomes but attribute negative outcomes to others or circumstances outside our control.  The crucial point here is that we all recognise this bias and discount it.

This means that if you genuinely feel that your positioning of the portfolio was prescient you will really need to accentuate it stylistically or your point or it will fall on sceptical ears.

British readers will recognise the occasional flash of envy when they think about how easy and rewarding it seems for more assertive French and US presenters to promote themselves.

Halo effect

Our final bias in this series relates to a personal focus – the Halo effect – where we take a single positive attribute in another person and extrapolate that positivity into everything else they do.  Its opposite is the Horn effect, where we are unduly influenced by a single negative trait in another.

Book cases are filled with advice to help individuals make a good first impression in many areas of life, but how much time do you allow for planning how you are going to try to shape the first few minutes of an investor meeting?  How often do you think of small talk as a stage to be got through before the real meeting begins?

Be very careful if you are guilty of being on automatic pilot – going through the motions.  It shows and it disadvantages you.

Force yourself to be “present” in that first few minutes.  Listen to answers, frame personal questions carefully.

The one thing that is genuinely unique about your strategy is you and your team. By all means get your presentation crisp and your story clear but if you’re not thinking about the psychology and your conduct you are missing some of the most influential components of human interaction that will benefit you and your team.

The fact that neuroscience is discovering more and more about how the brain works should be a real focus for client teams in crowded competitive environments.

If you would like to see how you or your team can improve your meeting success rate please contact us.

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