Dr. Daniel Crosby: Behavioral Finance, Episode #5

Did you know that investors that work with advisors typically do two to three percent better per year than their no-advice peers? We talk about this and so much more on this episode of the Mitlin Money Mindset™ podcast with our guest, Dr. Daniel Crosby.

Daniel is the Chief Behavioral Advisor at Brinker Capital. He is a psychology and behavioral finance expert who helps organizations understand the intersection of mind and markets. He has written several books on the psychology of investing and also constructed the Irrationality Index — a sentiment that measures and gauges greed and fear in the market from month to month.

You will want to hear this episode if you are interested in…

  • The Role of a CBO within an organization. [3:02]
  • Why finance and psychology go together like peanut butter and jelly. [5:05]
  • How an investor’s mindset affects the financial decisions they make. [7:38]
  • The effects of the pandemic on investors and their financial decisions. [12:16]
  • The three things great advisors do that help them pay for themselves. [19:08]
  • Actions investors can take to prepare themselves for the non-financial aspects of retirement. [19:45]

What IS a CBO, anyway??

When I asked Daniel what a Chief Behavioral Officer was, he told me that there have been fewer Chief Behavioral Officers at financial institutions than there have been people to walk on the moon! That said, he also believes that we will be seeing more and more financial institutions adopt roles like this in the future.

Daniel says the role of a CBO is someone who is in charge of educating advisors and their clients on how to avoid emotional extremes like fear and greed on the road to achieving successful investor outcomes. He explains that there is no silver bullet, no magic word, no one stock you can buy, but rather certain key behaviors you can adopt that are more likely to help you be more successful. Listen to learn what these behaviors are!

What could be more important than education in the investment game?

I asked Daniel how an investor’s mindset affects the financial decisions they make.

Daniel responded that mindset has EVERYTHING to do with it! You can be easily moved from your “sweet spot” into a place where you’re making decisions from an emotional extreme — either fear or greed — and they are seldom good decisions.

Also, while early money lessons and scripts can play a big role, the impact of education on behavior can be very limited and a weak predictor of behavior. He believes that we need more “just in time” education — or education in the moment of making decisions. This is where a good advisor can play a key role in a client’s investment future. Tune in to hear more of the discussion about education vs. behavior and mindset!

How financial advisors pay for themselves long term

Daniel and I talk about whether it is better to have an advisor, not just in times of volatility, but even in more moderate financial climates. He relates that there is quite a bit of empirical evidence that shows that those who work with financial advisors tend to dramatically outperform those who don’t.

However, it’s not for the reasons most people think.

83% of financial advisors believe that the number one value they provide for their clients is behavioral coaching. Be sure you listen and pick up some of the ways an advisor adds this kind of value to their services!

Resources & People Mentioned

Daniel’s Books:

Connect with Dr. Daniel Crosby

Educated at Brigham Young and Emory Universities, Dr. Daniel Crosby is a psychologist and behavioral finance expert who helps organizations understand the intersection of mind and markets. Dr. Crosby’s first book, Personal Benchmark: Integrating Behavioral Finance and Investment Management, was a New York Times bestseller. His second book, The Laws of Wealth, was named the best investment book of 2017 by the Axiom Business Book Awards and has been translated into 5 languages.

His latest work, The Behavioral Investor, is a comprehensive look at the neurology, physiology and psychology of sound financial decision-making. When he is not consulting around market psychology, Daniel enjoys exploring the American South, fanatically following St. Louis Cardinals baseball, and spending time with his wife and three children.

You can connect with Daniel on Twitter and LinkedIn.

Connect With Mitlin Financial

  • podcast(at)MitlinFinancial.com – email us with your suggestions for topics or guests

Subscribe to Mitlin Money Mindset on
Apple Podcasts, Spotify, Google Podcasts


Guests on the Mitlin Money Mindset Show are not affiliated with CWM, LLC, and opinions expressed herein may not be representative CWM, LLC. CWM, LLC is not responsible for the guest’s content linked on this site.

Get in Touch

In just minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Contact Us

Stay Connected

Business professional using his tablet to check his financial numbers

401(k) Calculator

Determine how your retirement account compares to what you may need in retirement.

Get Started