Behavioral Finance
Behavioral Finance, Built into Every Part of Wealth Management
Behavioral finance is the study of how people actually make financial decisions, as opposed to how textbooks assume they do. Traditional finance treats investors as perfectly rational. Real people aren’t. We feel losses more sharply than gains, follow the crowd when markets are rising, and hold on to what’s familiar even when it no longer serves us.
Those tendencies have a cost. Researchers have long documented what we call the behavioral gap: the difference between what investments return and what investors actually earn, because people buy after prices rise, sell after they fall, or abandon a sound plan at the wrong moment. The gap has nothing to do with intelligence or effort. It comes from being human when markets get irrational.
Sunpointe was built on the belief that awareness and discipline can help. Behavioral coaching isn’t a separate service here. It’s part of every relationship, whether you work with us as a family office or as an individual client. It shapes how we construct portfolios, how we plan for major decisions, how we help families talk about money, and how we stay in touch when markets turn. Our goal is to help you recognize the patterns behind your decisions and work to reduce their impact on your long-term plan.
You’ve Made Decisions You Later Regretted
Selling near a low or chasing a hot investment taught you something, and you want a process that helps you avoid repeating it.
A Big Decision Carries Emotional Weight
A business sale, an inheritance, or retirement involves more than numbers, and you want help separating feelings from facts.
Your Family Sees Money Differently
Spouses, siblings, or generations bring different attitudes toward risk and spending, and you want a shared way to make decisions.
Meet Michael Pompian
Michael Pompian is Sunpointe’s founder and Chief Investment Officer, and behavioral finance has been a central focus of his career. He wrote the behavioral finance curriculum for Level III of the CFA Institute’s Chartered Financial Analyst program, the material candidates study at the final stage of earning the charter. He has also written five books on the subject, including Behavioral Finance and Your Portfolio and Behavioral Finance and Investor Types.
His work introduced the Behavioral Investor Type framework, a practical way to identify how a person’s natural tendencies shape their investment decisions. At Sunpointe, those ideas aren’t theory. They inform how we get to know clients, how we build portfolios, and how we coach through difficult markets.
Chartered Financial Analyst
Chartered Alternative Investment Analyst
CERTIFIED FINANCIAL PLANNER® professional
of the CFA Level III behavioral finance curriculum and five books
How Behavioral Coaching Works
Good coaching starts with understanding how you make decisions, not just what’s in your portfolio. Here’s how we turn behavioral finance research into a practical part of your financial life.
Identify Your Investor Type
We start by learning how you naturally approach money and risk, using the Behavioral Investor Type framework Michael developed.
Diagnose Specific Biases
We look for the particular tendencies, like loss aversion or overconfidence, that are most likely to influence your decisions under pressure.
Build Around You
We design your portfolio and plan with those tendencies in mind, adapting to some and working to moderate others.
Coach Through Markets
When markets turn or big decisions arrive, we coach with facts, conversation, or both, depending on what helps you stay on course.
Inside Behavioral Finance at Sunpointe
Behavioral finance isn’t a single meeting or a report you receive once. It shows up throughout your relationship with us, especially in the moments when decisions carry the most weight. Here’s where you’ll notice it most.
Our two-category risk framework explains the risk you’re taking in simple terms, so your portfolio is one you can stay with when markets move.
When markets fall sharply, we stay in touch to put events in context and revisit your plan, so emotion doesn’t drive the decision.
A business sale, an inheritance, or retirement can stir strong emotions. We help you slow down, weigh the trade-offs, and make choices that fit your long-term plan.
Family members often see money differently. We help families understand those differences and build a shared way to make decisions across generations.
We can organize your wealth around specific goals, such as near-term needs and long-term growth, which often makes it easier to stay committed to each one.
Through Michael’s writing and our regular market updates, we help you understand the patterns behind investor behavior so you can recognize them in yourself.
Ready to See What Drives Your Financial Decisions?
Start with a conversation about how you approach money, what’s worked for you, and the decisions that have been hardest to make. We’ll show you how behavioral coaching could fit into your financial life.
See Behavioral Finance in Practice
Behavioral finance shapes every Sunpointe relationship, whether you’re a family office managing wealth across generations or an individual navigating your own financial life. Explore how it works in each, or start with Michael’s own writing on the patterns behind investor behavior.
Family Office
For families and family offices managing wealth across entities and generations, with investments, planning, governance, and reporting coordinated in one relationship.
Wealth Management
For executives, business owners, and individuals navigating significant financial decisions, with planning and portfolio management built around their goals.
From Michael’s Desk
Michael’s perspective on investor behavior, markets, and financial decision-making, from our Resource Center.
Frequently Asked Questions
Answers to the questions we hear most about behavioral finance.
Call us at 314-880-0821 or send a message.
Behavioral finance is the study of how emotions, mental shortcuts, and personal tendencies shape financial decisions. It matters because investors often earn less than the investments they own. The shortfall isn’t caused by markets. It comes from decisions made at emotional moments, like selling after a decline or buying after a run-up. Understanding those tendencies is the first step toward making steadier decisions over time.
The behavioral gap is Sunpointe’s term for the difference between what investments return and what investors actually earn. It’s a well-documented pattern, typically caused by emotionally driven decisions such as selling during downturns, chasing recent performance, or abandoning a long-term plan. Sunpointe’s behavioral coaching works to help clients recognize those moments and reduce their impact on long-term goals.
Michael Pompian, Sunpointe’s founder and Chief Investment Officer, wrote the behavioral finance curriculum for Level III of the CFA Institute’s Chartered Financial Analyst program. He has written five books on behavioral finance, including Behavioral Finance and Your Portfolio and Behavioral Finance and Investor Types, and developed the Behavioral Investor Type framework. He holds the CFA®, CAIA, and CFP® designations.
Sunpointe applies behavioral finance throughout the client relationship. We start by identifying each client’s investor type and specific biases, then build portfolios and plans with those tendencies in mind. Our two-category risk framework makes risk easier to understand, we stay in touch during sharp market declines, and we help families talk through financial decisions together.
Behavioral coaching is part of every Sunpointe relationship, not a separate service or add-on. Whether you work with us through family office services or individual wealth management, the same principles shape how we build your portfolio, develop your plan, and guide you through difficult markets and major decisions.
Michael Pompian shares his perspective on investor behavior and markets in From Michael’s Desk, a collection of articles on the Sunpointe Resource Center. His book Behavioral Finance and Your Portfolio, published by Wiley, offers a deeper look at the Behavioral Investor Type framework and how investors can apply behavioral finance to their own decisions.
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