By Weld Royal

Emotion, bias, history, and idiosyncratic beliefs often influence decisions about money more than spreadsheets or logic. That view shapes Brendan Frazier's work as chief behavioral officer at RFG Advisory, which provides compliance, technology, and other services to about 122 independent wealth management firms. He argues that behavioral finance is reshaping both wealth management practices and client relationships.

Speaking with Barron's Advisor, Frazier, 37, talks about the evolving role of behavioral finance expertise in wealth management, how technology is accelerating its adoption, and why people routinely act on irrational ideas, despite receiving sound advice. "It's called the knowing-doing gap," he says. "How do we close the knowing-doing gap? You give people a financial plan, you tell them what to do, and then most of them won't do all of the things."

Chief behavioral officer is an unusual title. What do you do? It's twofold. One big area of focus is how we communicate and educate our advisors on the fact that money is not just logical -- it's emotional. Financial success isn't just making a spreadsheet; you have to understand your biases, the emotions you experience, and how they impact your financial decision-making. I think that we're blazing a trail, setting the trajectory for the future of the industry.

Are you the industry's only chief behavioral officer? There are more out there. Daniel Crosby at Orion has written a bunch of books, and has a podcast. Tim Maurer at Signature FD -- his title is chief advisory officer, but I know from his work that he does a lot around the human side and behavioral science.

Is there one thing accelerating the industry's interest in the human side of money? The industrywide movement to focus on behavioral finance and the human side of advice has been sparked by the advancement and proliferation of technology. As technology continues to grow and expand at a rapid pace, it's shifting the value and the future of advice more toward the human side. Advisors who want to not only survive, but thrive by insulating their value against the threat of technology have to realize that the only areas in which we excel -- that technology can't replicate -- fall under the human side of advice.

How long have you been grappling with the way behavior changes wealth management? I've been the chief behavioral officer at RFG since March of 2024, but I've been doing work on the behavioral side, or the human side, since about 2020. I did it on my own for a while. I was working with clients, and I found myself on an almost a daily basis thinking, I feel like they just need a therapist right now. Or that I'd be better off with a degree in psychology than a degree in finance. That's when I started doing a lot of my own research, but not in finance. My wife's in therapy so I was reading what they are teaching in psychology and communication, how the brain works, and about neuroscience.

Advice That Sticks, a book by Moira Somers, was my gateway drug to this side of the business. It's written for advisors on why clients don't follow through, and then what to do about it. I remember reading it and thinking this should be essential reading for anybody that works with humans and money.

Are there other books that helped you understand the human side of money? First and foremost would be The Psychology of Money by Morgan Housel. I've read it three times, every time I think this is getting better. Another is Never Split the Difference, by Chris Voss. It's framed as a negotiation book, but it's basically about how to communicate at an elite level.

Has behavior around money changed? I have a really unsatisfying answer. I don't think anything's really changed, because while the markets change, strategies change, and tax laws change, human beings stay pretty consistent in terms of the way that we're wired, the way that our brains operate, the emotions and the biases that we fall prey to.

What about the impact of the flood of information on social media? The biggest difference is probably the need for someone to provide a signal in the noise. There's a lot of what would be called financial information or guidance that's pretty bad. People haven't changed. The world around us has shifted.

How did your podcast, The Human Side of Money , come about? In August of 2020, I started hosting this podcast, and figured if nothing else, I'd learn a ton on how to work with my clients. I'm just going to record them and put them out there and see if they help other people, other advisors. Fast forward about two years later, when people started reaching out, saying this is the podcast I always needed. I never knew it existed, or thank you so much for doing this. That's when I knew I had something.

What episodes are popular? One episode sticks out with author Mitch Anthony. It was about how retirement is an outdated idea. We weren't actually made to retire. If human beings aren't built to retire, we need to have purpose -- how do you find purpose and meaning in the later part of your life? One of his quotes that I love is, "You need enough money to sleep well at night, and enough purpose to wake up in the morning." That episode got a lot of feedback.

Another podcast with an advisor named Natalie Taylor walked through how she delivers values-based financial advice. She doesn't just find out what your goals are, she helps people tie them to a financial plan. She had this quote about how she would rather give somebody advice that's 80% optimal, that gets them to act, rather than advice that's 100% optimal, but that they don't ever do anything with.

Episode 75 with Ted Klontz is all about the neuroscience and psychology of communication skills, like how to be a better listener. It got a good response.

Do you use AI in your work? My answer would be different from two months ago, which would have been different from three months ago. AI is like a content sidekick, but it is also like a brainstorming partner. For example, I'm using it to review all of our coaching programs to figure out what we are missing. Can we be doing anything better?

What are the toughest behavioral issues advisors face? I'll give you my top five. Number one, not for advisors, but for clients themselves, is to actually do the things that they know that they're supposed to do. It's called the knowing-doing gap. Researchers have studied how often patients follow through on their prescriptions. They found about 50% of people will actually fill their prescriptions, and about 25% will actually take their prescriptions through to completion. It's similar to financial plans. You give people a financial plan, you tell them what to do, and then most of them won't do all of the things.

A second big one is safely navigating down markets -- helping people stay invested, regulate their emotions, and not make an emotional decision that could derail their financial future in the midst of fear and uncertainty during a turbulent market.

Number three would be getting retired clients to shift from a saving mentality to a spending mentality. These clients have worked their whole career, saved for 40 years. They have this great discipline. It's a real skill to get them to flip a switch, to be able to spend their money and live their lives, and create experiences that they have the means to do but otherwise wouldn't do because they feel like it's a waste, or they're afraid they're going to run out of money, or they just don't know how to spend.

The fourth is helping people get really clear on the things that actually matter to them, not just spending money because they are keeping up with the Joneses. The fifth is helping clients rein in spending so they can accumulate and accomplish the things they want to do. It shows up with financial advice clients, but not as much, because they tend to be further along in life and wealthier.

Are some advisors reluctant to wade into the human side of money? Nobody says to me, "No, no, no, no, all my clients are completely logical, rational human beings who never make bad decisions, and follow everything I tell them to do." But not everybody believes that it's essential to building and growing a practice, or that it's essential to serve your clients at the highest level.

Generally, those advisors have been doing it for 30 to 40 years. They grew up in a world where this field was about trading stocks, numbers, and investments. I can't blame anybody who says, "I'm 65 years old. I've been doing this since before you were born, and my clients seem happy. I don't want to learn something new."

Younger advisors see the industry moving this way -- with AI and technology automating technical aspects. Tech is growing fast -- it does things faster, cheaper, more reliably. You can get a financial plan in about 12 minutes without exposing your personal flaws. But will an advisor do it better? Maybe -- but not without adding human value. They want to do things that technology can't.

How do you explain the benefits to advisors? I tell them, you're not going to be a therapist, but you're going to have better conversations. You're going to uncover more from the client, and reach higher levels of trust. We know that higher levels of trust leads to more referrals, more willingness to refer, more consolidating of assets, higher client retention.

How can an advisor build trust? We all think our clients trust us, but nobody ever says here's how you can actually build trust with another human being. A lot of it is teaching how to ask better questions. It sounds simple, but it's really hard to do. Then also, how do you listen with empathy and curiosity? Don't ask yes or no questions, and don't think about the next thing you're going to say while they're talking.

Let's say a client simply says he wants to retire at 65. How does behavioral finance apply then? Through follow up questions, you find out, he didn't just want to retire at 65. He wanted more time and freedom to spend with family because his dad died when he was 62, and he's afraid that the same thing could happen to him. Now you know what you really need to solve for is finding ways to give the client more time with his family.

Thanks, Brendan.

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July 24, 2025 15:16 ET (19:16 GMT)

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