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The Psychological and Practical Hurdles of Changing Money Managers

Updated: Feb 23

The most common reasons investors may hesitate to leave their current money managers, even in cases of poor performance, are deeply rooted in psychology and practical considerations. Firstly, there's the fear of admitting past mistakes and realizing losses, known as loss aversion, which can be emotionally challenging.


Investors also fear the regret of potentially missing out on future gains if they switch. Inertia and familiarity often play a role, as people tend to stick with what they know. Additionally, a lack of information about alternative options or the process of finding a new advisor can be daunting. Trust and loyalty built over time, social pressure from peers, and the perceived high costs associated with switching further contribute to the reluctance to make a change. These factors collectively create a strong psychological and practical barrier that can hinder investors from making necessary adjustments to their investment strategy.


General informational content only. Not tax, legal, or investment advice. Consult a financial professional before making investment decisions. Conduct due diligence.All investments involve risk, including potential loss of principal.

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