Two-fifths of high net worth individuals
(HNWIs) wished they had more self-control over their financial
behaviour by following stricter investment strategy rules, new
research suggests.

Barclays Wealth’s latest Insights
report on behavioural finance suggested HNW investors with more
than £10m ($16m) had the greatest desire for financial
discipline.

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The Insights report said emotional
trading can cost investors up to 20% in returns over a ten-year
period and HNW investors with a rules-based strategy to investments
had on average 12% more wealth than those who did not use
rules.

 

Asia-Pacific shows greatest demand for
financial discipline

Globally, respondents in Asia-Pacific had the
greatest desire for financial discipline, particularly in Taiwan
and Hong Kong. In contrast, developed markets showed less desire
for self-control over financial behaviour.

The report showed that investors used rules
more in financial decision making (89%) than they do in everyday
life (72%).

The most popular financial discipline
strategies include using cooling-off periods (91%) and setting
deadlines (90%). Delegating to others (72%) and limiting your
options (64%) were less popular options.

The report, Risk and Rules: The Role of
Control in Financial Decision Making, was based on a global
survey of more than 2,000 HNWIs.