Today’s financial professionals face one key problem – nudging reluctant investors to save for retirement.

And the solution to that dilemma could lie in the creation of one more program in addition to 401(k)s that would make it mandatory for people to properly plan for the future, according to Santa Clara University behavioral finance professor Meir Statman.

“We have to shove [those investors] into doing what’s in their best interest and really make it mandatory,” Statman said in an interview ahead of his presentation scheduled for the Investment Management Consultants Association’s annual conference in Seattle this week. “I’m talking about a program where people have what they have now as a 401(k), but cannot draw on it before retirement age, which is very common today.”

Statman is scheduled to speak on Monday morning at the conference as part of what IMCA Executive Director and CEO Sean Walters calls “blow your ears back content.”

The event is the fourth annual conference the industry association—which provides education and credentials to the wealth management industry—following previous events in Orlando, Fla., Las Vegas and Washington, D.C.

In addition to Statman, this year’s conference lineup also includes Dan Ariely, behavioral economics professor at Duke University; Neil Barofsky, former inspector general for the Troubled Assets Relief Program, and Nassim Nicolas Taleb, professor at the Polytechnic Institute of New York University and author of The Black Swan, among others.


Statman, who is scheduled to take the stage first on Monday morning, said his presentation includes three lessons for financial advisors as they attempt to grapple with two sets of investors—those who save and those who do not.

The first lesson is to know both yourself and your clients, Statman said. That includes staying aware of clients’ cognitive errors, emotions, hopes and fears.

Next, advisors must use science to overcome their clients’ cognitive errors and emotions and identify their needs, he said. And finally, advisors also have to have a good bedside manner. That requires not only staying abreast of diversification and investment instruments, but also being able to identify what those clients want, even if they do not directly express those wishes.

“When you ask investors what they want from their investments, they will say high returns or great profits, or great profits with low risk,” Statman said. “But if you really pause and ask them what the money is for, you realize that they don’t usually make the connection between the investment part and the consumption part, or what the money is for.”


For IMCA, the annual conference comes on the heels of its New York conference in February, which was oversold, and reaching 9,000 total members.

And that increased industry participation also coincides with something else—more optimism, Walters said. A survey the organization did of its members in January showed that 82% said they believe the stock market will go up in 2013, while 79% said the economy should grow.

“There’s a general good feeling among the advisor community and that’s going to fuel continued growth for us,” Walters said.

IMCA is also continuing with some big changes to its certification programs. The Certified Private Wealth Advisor (CPWA) program will have a completely new curriculum for the class that starts in September and runs through March. That will include more content on behavioral finance and portfolio management.

The Certified Investment Management Analyst (CIMA) certification program will follow with its own makeover this year, Walters said. That will include more content relevant to rep as portfolio managers and on topics including alternatives and portfolio risk management.

IMCA is also planning to unveil new research on Tuesday on the career results advisors, particularly those who work on teams, have seen after earning a CIMA certification. That workshop, titled “What Top Performing Advisors and Teams Have in Common,” will be presented by Sophie Schmitt, a senior analyst at Aite Group, a financial services research and consulting firm that oversaw the research.


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