iStock.com/Daenin Arnee
downturn or family change, they uncover not only the financial impact but also the client’s emotional responses. The insight lies in seeing how people interpret and cope with uncertainty. The aim is less about calculating an exact savings target and more about testing flexibility, resilience and true risk tolerance.
Generational realities and the meaning of time The shift from retirement to resilience also reframes how we understand time, the third theme Peters explores. For older generations, time was the friend of compounding. For many younger investors, it feels like a threat. “Some have already surrendered on the idea of retirement,” Peters notes. “They see it as unrealistic. But resilience, being ready for whatever future may come, gives them a reason to save.” This idea draws on the principle of loss aversion in a positive way. By framing saving as protection against the loss of future freedom or opportunity rather than as a sacrifice of today’s pleasure, advisors can motivate constructive behaviour. Resilience turns deferred gratification into agency. It also reconnects long-term planning to short-term meaning. Clients who link future security with current purpose see saving not as postponement but as progress.
From nudges to narratives Behavioural science once focused on nudges: small environmental tweaks that guide better decisions. Peters believes the next frontier lies in narratives: helping people construct coherent stories about their financial lives. “Nudges correct habits,” she says. “Narratives change identity.” When clients begin to see themselves as resilient investors rather than fearful savers, their entire relationship with money changes. This shift turns advisory conversations from transactions into dialogue about values, trade-offs and purpose. Moving from nudges to narratives marks a broader evolution in behavioural finance, from simple heuristics toward metacognition and meaning. The goal is no longer just to help people avoid mistakes but to help them build self-awareness and resilience in a world that will never be certain.
For financial professionals, that may be the ultimate behavioural insight: in an age of algorithms, the most valuable asset is still wisdom.
Ed Ho, CFA, MSc, is an energy consultant specializing in strategy, policy and finance, focusing on the challenges and opportunities of the energy transition. He is a candid storyteller with the goal of driving consensus through fact-based diplomacy.
The takeaway: Resilience as fiduciary ethic Peters’ vision does not discard the fundamentals of finance; it reanchors them. Risk, return, diversification and discipline remain central, but the objective shifts from maximizing wealth to sustaining resilience across whatever futures unfold.
“We’ve spent decades studying what people get wrong about money,” she says. “Now we have to ask how we think about our own thinking.” ©
It is a call to intellectual humility and moral imagination – qualities the profession will need as human and automated decision-making become more intertwined. “We can model volatility,” Peters says, “but we cannot model meaning. That is where advisors come in.”
2025 CFA Society Toronto. All rights reserved. The Analyst | Winter 2025
What's Next? For those who want to dig deeper into financial behaviour, explore these books recommended by Kelly Peters: ➜ Happy money: The Science of Happier Spending by Elizabeth Dunn and Dr. Michael Norton
➜ Thinking, Fast and Slow by Daniel Kahneman
➜ The Why Axis: Hidden Motives and The Undiscovered Economics of Everyday Life by Uri Gneezy and John List
21