Humans Under Management (HUM) Conference, Cape Town, 10 September 2019
After making waves in the UK, HUM is headed to South Africa. Dedicated to the exciting and exceedingly influential field of behavioural finance, HUM will make you rethink everything you thought you knew about investor behaviour…with transformative and lasting benefits for your clients.
Are Bitcoins the Tulips of the 21st Century? Why do all investors – from 1619 to 2019 –make the same mistakes? And what can we do about it? These are just a few of the questions we’ll grapple with at South Africa’s first Humans Under Management (HUM) Conference, which is taking place in Cape Town on 10 September.
The brainchild of UK-based financial adviser Andy Hart, HUM is one of the world’s first events to be dedicated to the ever-expanding field of behavioural finance. “If we want to really understand how people make financial decisions,” says Hart, “We need to consider more carefully how emotional and irrational humans can be.”
Traditional economic theory assumes people to be rational decision-makers, but the nascent field of behavioural economics has blown this theory out of the water.
Why all the fuss?
Behavioural economics has been a long time coming. Generally speaking, investors have always been their own worst enemies. US Research company, Dalbar Inc’s research, has shown consistently that, regardless of time horizon, the average investor underperforms their investments by around 5% per annum.
As far back as the 1600s, people succumbed to so-called ‘tulip mania’, thinking that there were untold riches to be made from investing in tulips. This ended with more people in rags than riches. And before you start to think that society was not sophisticated back then, consider the global financial crisis of 2008. Or the Bitcoin story that is currently playing itself out.
We’ve been getting so much wrong
Since time immemorial investors have tended to buy high and sell low. Until now, this quirk of human nature has been addressed by the industry via a two-pronged approach comprising financial education on the one hand and risk profiling on the other. Neither of these approaches has worked.
Investor education has promoted financial ‘literacy’ by seeking to explain complex concepts to regular folks. To draw an analogy with the health industry, the focus has been on the Aspirin and antibiotics, rather than on nutrition, exercise and sleep.
The second intervention by the industry has been to apply a risk-profiling approach to investors. The theory is that knowing your risk profile allows you to invest in a product with a matching risk profile. The problem is that risk profiling often only focuses on an individual’s general proclivity for risk without taking into account the changes that happen in all of us as markets rise and fall. A more comprehensive risk profile would include a person’s financial capacity to take risk, and it would consider the level of risk they actually need to take to achieve a particular return or goal.
But even a three-dimensional risk profile can never capture the complexity of a person’s relationship with money. Money goes to the core of our being and can impact our lives hugely. Every year, money ranks as the top stressor for Americans, and there’s nothing to suggest South Africa is any different.
Andy Hart started the HUM Conference to provide a forum to develop a greater understanding of behavioural economics and to bolster advisers’ ability to positively influence their clients’ behaviour.
About the conference
South Africa’s first HUM Conference will take place on 10 September 2019 at the Allan Gray Auditorium, V&A Waterfront, Cape Town. It’s been brought to our shores by two local co-organisers, Rob Macdonald, Head of Strategic Advisory Services at Fundhouse, and Pierre Taljaard, an independent financial adviser and consultant.
The keynote speech will be given by Christo Brand, one of Madiba’s prison guards who developed a close friendship with the statesman over the years of his incarceration and beyond. Not your average speaker at a financial conference and, as Hart puts it, “Clearly someone who will understand a little about human behaviour.”
Macdonald, who attended HUM London in 2018 is excited to be bringing the conference to South Africa. “Practitioners and experts go to the core of every financial adviser’s work, engaging with their clients about the relationship between their lives and their money,” he says.
Taljaard speaks from experience when he says that no matter how good a financial plan is, its success ultimately depends on how the client behaves in relation to their plan. “Influencing this behaviour is the real work of financial planning,” he says pointedly.
“What makes HUM even more unique and exciting is that it is organised and run by advisers, for advisers,” adds Taljaard, who is especially appreciative of the event’s sponsor exhibitors who have “respected the independent nature of both the agenda and the speakers.”
What are you waiting for?
Attending HUM is the first step in a journey that will ultimately transform the lens through which you see your clients…In the process drastically improving their investment success. Spots are limited, so secure yours now…
When: 10 September 2019
Where: Allan Gray Auditorium, V&A Waterfront, Cape Town
Price: R 1500