If you’ve ever felt that traditional client segmentation just doesn’t quite cut it, you’re not alone. And if you’re anything like us, you’ll be excited by what we heard in a recent IFA Talk podcast featuring Dr Greg B Davies, Head of Behavioural Finance at Oxford Risk.
Greg joined IFA Magazine to unpack the game-changing potential of behavioural personas — and why understanding your clients’ emotional relationship with money might just be the secret weapon every adviser needs.
Let’s dive into the key takeaways — and what they mean for you and your advice process.
Moving beyond demographics
As Greg pointed out, “every organisation we go into will have some sort of segmentation of their clients,” but it’s often based on “very standard, observable demographics.” Age, wealth level, location — you know the drill.
The problem? “Anytime you look within one of these traditional segments and you apply a behavioural overlay onto it, you see that within that segment… we still see at least four or five different behavioural personas sitting in there,” Greg explained.
In other words, two clients of the same age and asset level can behave completely differently when it comes to financial decision-making. And if we’re using the same approach for both, we’re missing huge opportunities to connect with them more meaningfully.
Oxford Risk’s solution? A behavioural personas tool, designed to “statistically isolate” different financial personalities and allow firms to communicate far more effectively.
What is a behavioural persona?
At the heart of Oxford Risk’s approach is their financial personality assessment, a tool that “measures 16 plus distinct dimensions of financial personality.”
Yes, risk tolerance is part of it — but as Greg stressed, “it is only one small corner of your financial personality.” Other dimensions include traits like impulsivity, composure, confidence, and financial literacy.
By mapping these dimensions, the system identifies which of the 10 behavioural personas a client belongs to. And it’s not just about labels. Once a client is assigned to a persona, advisers can tap into libraries of personalised nudges, messages and solutions that are tailored to that individual’s emotional drivers.
“It’s not just about segmentation,” Greg said. “It’s about what you do with that segmentation to deeply personalise your engagement, your conversations, your client communication across a very wide range of things.”
The cash conundrum
Greg highlighted a particularly striking example of why behavioural personalisation is so important.
“Reliably, the biggest behavioural cost for most investors is not what most people think it is,” he said. “Most people think it’s the mistakes you make when you’re investing. Actually, the biggest behavioural cost for most investors is the fact that they sit on too much cash, doing nothing for far too long.”
Moving money from the safe comfort of cash into the perceived risk of investments is emotionally difficult for many clients. But with behavioural personas, advisers can use targeted interventions to address those specific fears — giving clients “the emotional comfort to take their cash and put it to work.”
Different clients need different messages. And that’s where knowing their persona makes all the difference.
Getting ready for Consumer Duty
It’s no secret that the FCA is pushing for more tailored client support. Greg and the team at Oxford Risk are fully behind it — but he issued a word of warning.
“If you are segmenting based only on easily observable demographic features of your clients, yes, you are splitting clients into groups which may have different financial needs,” he said. “But you’re completely ignoring that even within those groups, there will be people who have very different emotional needs.”
And it doesn’t stop at communications. Emotional drivers can fundamentally change the suitability of solutions.
Take, for example, the retirement decision: to draw down or to annuitise. Two clients with identical financial circumstances might need totally different advice depending on their impulsivity levels.
“Someone who is highly impulsive and is drawing down from a pot of assets… is likely to overspend, not stick with their withdrawal policy, and is likely to face greater sequencing risk,” Greg explained. That client might be better suited to a guaranteed income product — even if the actuaries’ models suggest otherwise.
In short: emotional behaviour can and should change your recommendations.
Retirement: the emotional crucible
Retirement isn’t just a financial transition; it’s a deeply emotional one. Clients face complex choices about money, longevity, death, and legacy — often for the first time.
“Financial decision-making at retirement is, for most people, far more emotional and far more complex than any other point of their lives,” Greg said.
Behavioural personas can shine a light on key emotional factors like impulsivity or spending reluctance. As Greg pointed out, many retirees live in “self-imposed poverty,” scared to spend even when they could comfortably do so. Knowing a client’s persona can help you tailor the support that empowers them to live the retirement they deserve.
Easy to use, powerful insights
Best of all, implementing behavioural personas isn’t rocket science.
“It’s super easy to get going,” Greg reassured listeners. Clients complete a quick two-minute assessment — and the system instantly delivers rich insights about their personality and persona.
Advisers receive practical, client-friendly outputs: where the client sits relative to the UK baseline population, what their persona is, and personalised recommendations for engagement. Meanwhile, firms can aggregate data across their client base, spotting trends and opportunities at scale.
“The management insight that you get from it is wonderful,” Greg said. You can even profile your adviser team to understand how their natural personas align (or don’t) with those of your clients.
Composure in market volatility
To bring it all to life, Greg shared an excellent example: composure during market volatility.
For clients with low composure, the job is to “provide them emotional distance” — calming reassurance about the long-term picture. For clients with high composure, the challenge is the opposite: getting them to engage, to take opportunities when markets dip.
“Simply on just even one dimension of personality, you can use a hook like that in two completely different ways, once you know the personality and the persona of the person in front of you,” Greg explained.
That’s personalisation in action — and it’s an approach that resonates strongly with Consumer Duty’s emphasis on “good client outcomes.”
Why this matters now
Behavioural finance isn’t new. But as Greg noted, until recently it was hard to apply at scale. Now, with better data, better tech, and smarter models, it’s finally practical.
“For most of my 20 years of professional life in applied behavioural finance, it’s been very difficult to scale it,” he said. “Now we finally get to the point where I think behavioural finance can really affect decision-making at scale, and that is really exciting.”
And it’s not just exciting — it’s essential.
In a world of Consumer Duty, growing advice gaps, and increasingly sophisticated clients, personalisation isn’t a “nice to have.” It’s becoming the minimum standard.
A new frontier for advice
At the end of the day, behavioural personas offer advisers a new, powerful way to understand and support clients.
They help bridge the emotional gap between adviser recommendations and client actions. They help you deliver more effective solutions, more engaging communications, and ultimately better outcomes.
To listen in to the full podcast recording with Greg, you can find it here: https://staging.ifamagazine.com/podcast-120-rethinking-advice-the-behavioural-finance-advantage-with-oxford-risks-dr-greg-b-davies/
About Dr Greg B Davies PhD
Dr Greg B Davies is a globally recognised expert in applied behavioural finance, sustainable investing, and the science of better decision-making.
For over two decades, Greg has worked at the intersection of psychology, finance, and technology—helping individuals and organisations overcome the biases, noise, and emotional hurdles that stand in the way of better choices. He combines rigorous academic insight with a gift for making complex ideas practical, engaging, and often unexpected.
He holds a PhD from Cambridge in Behavioural Decision Theory and has advised many of the world’s largest financial institutions.
