Investor persona helps advisors get a quick grasp of the client’s behavior patterns to qualify prospects and provide truly personalized services.

Investor persona is primarily driven by how investors behave when the market goes up and down. According to research by Dr. Andrew Lo from MIT based on a global survey of 30,000 investors collected over three years, investors can be put into the following categories.

  • Passive Investor: Tend not to react to market movements. Believe in buy and hold. Often invest in index funds. According to the research, 35% of investors are passive investors.
  • Trend Follower: Tend to chase market trends – to buy when the market goes up and sell when the market goes down. According to the research, 27% of investors are trend followers.
  • Contrarian: The opposite of trend followers. Tend to buy when the market goes down and the sell when the market goes up. According to the research, 8% of investors are contrarians.
  • Safety Seeker: Value safety over anything else but may expect investment return that doesn’t match the risk tolerance level. According to the research, 19% of investors are safety seekers.
  • Risk Seeker: The opposite of Safety Seekers.
  • Adaptive Investor: Adaptive investors are willing to stay put during short-term fluctuations but are cognizant of large market trends.
  • Other: If you exhibit inconsistent investment behavioral patterns. You are either a sophisticated investor, or confused about the market.

A Memorable Twist

You may choose the following set of personas to make it more memorable.