Can neuroscience help us make better investment decisions? At SS&C Deliver, we’ll hear from someone whose career bridges both fields––study of the brain and study of the markets. One of the co-founders of Dallas-based Tolleson Wealth Management, Eric Bennett stepped out of the business for a few years to serve as Executive Director of the Brain Performance Institute. Now he’s back at the firm as Chief Investment Officer.
In his session entitled “Beyond Behavioral Finance – Neuroscience Meets Investing,” Eric will explain how neuroscience can teach us to make the best use of our brain power to make better investment decisions. We had a chance to talk to him in advance about how these two worlds intersect.
Q: What sparked your interest in the connection between neuroscience and investment decision making?
EB: I have always loved investing and understood how emotions can impact investment decisions. During my time at the Brain Performance Institute, I learned about the biology of the brain in decision making, among many other things. When I learned that neuroscience tied directly into behavioral finance, and that neuroscientists were working on ways to train our brains to make better decisions, I felt I could help build this bridge between investing and neuroscience that was not there before.
Q: Topline, how does your experience with the Brain Performance Institute influence your work as a chief investment officer?
EB: I think a lot more strategically and creatively than I did six years ago. Data, experience, opinions, “knowing stuff” is important for anything, including investing. I did not know what true creativity was until I worked at the Brain Performance Institute. Neuroscience attracts creative people, since there is so much we don’t know about the brain and it’s much less tangible than other forms of biology. Seeking to understand how the soul works is very different from, say, seeking to cure cancer. When you are around that mindset every day for four years, it rubs off on you. I am more focused today on discovering rather than “knowing.” I used to have to work at that – now it comes much more naturally.
Q: Your firm grew out of a single-family office and still caters to high net-worth families. What concerns do your clients share in common these days?
Honestly, the top concerns are not investment related, they are family related. “How can my wealth have a positive impact on my family and legacy?” is a big topic. Specific to investing, the short-term conversation is navigating the market and the recession that “has” to happen since the current economic growth period has been so long. Long-term, their concern is “How do I meet my spending, philanthropic and legacy goals without worrying much?”
Q: We’ve had several years of strong market performance. As a CIO, do you see anything on the horizon we should be watching for?
EB: I think we are early into a massive technology revolution that will dwarf the industrial revolution. But it will take decades to play out. I think worrying about a recession rather than focusing on the opportunities is a mistake. I also think focusing on the public markets is a mistake. The private markets, while certainly overpriced in some areas, are too large and interesting to ignore. That said, my mindset is rooted in protecting on the downside since that is generally more important to our clients. I think a long-term mentality will pay off handsomely.
Eric’s presentation is one of several “super sessions” that crosses all industry segments and job titles represented at the conference. It takes place on day one, Tuesday, September 17, at 10:50 AM. Just one more reason to join us at SS&C Deliver for expert thought leadership on trends shaping our industry.