Toronto-based TD Wealth is formalizing its partnership with the University of Toronto’s Behavioural Economics in Action at Rotman (BEAR) centre in an effort to better understand clients and the technology advisors need to serve them.
“We’ve been working with Rotman and BEAR informally for some time [and] this is our opportunity to formalize that relationship” says David Terry, vice president, segment strategy and digitally enabled advisor, TD Wealth. “It’s been a great partnership for us as we learn more about the application of behavioural economics, behavioural finance, in terms of the way that both our advisors and clients operate.”
Through the partnership, which includes an investment of $200,000 over two years in the centre, TD and BEAR will conduct research into topics such as Canadians’ attitudes towards wealth, how they make their financial decisions, and how they view risk both individually and as a family.
When it comes to technology, BEAR and TD Wealth have been working together for some time. More specifically, TD Wealth consulted with BEAR in the creation of its Discovery Tool, which launched in 2017. The tool guides investment advisors’ clients through a series of questions so as to identify their “wealth personality,” which in turn helps advisors to have deeper conversations with clients and craft more personalized financial plans.
Going forward, TD Wealth also hopes that BEAR’s research will assist the bank’s wealth management division in improving its Discovery Tool as well as identifying new tools that could help advisors and their clients.
“I do think Rotman and the feedback we get will give us better insights on: is there different technology? [Are] there different ways to improve the interaction [with clients]?,” says Dave Kelly, senior vice president, private wealth management, TD Wealth. “I don’t think we believe this is the only tool that we will put into play.”
One way in which BEAR’s research will help TD develop its technology is through the creation of tools that will keep clients on track with their financial goals. For example, BEAR’s research can help TD understand how it can develop and design tools that use the behavioural economics concept of a “nudge” — the use of positive reinforcement and indirect suggestions to influence behaviour —t o help clients follow through on their financial plans.
“We’re looking to [BEAR] to help make the processes, the tools, the you-name-it, easier for people to get things done and stick to the plan that they’ve built,” says Terry.