The McCausland Group and KPS Consulting, LLP Launch Study to Develop Practical Use of Kahneman's Nobel Prize Winning Studies in Behavioral Finance Vern Hayden, CFP, Past Member of CFP Board of Standards to Assist with Study

The McCausland Group will launch a study to develop a model that will allow for the practical application of Kahneman's studies on behavioral theories for use by our financial advisors.

Chicago, IL (PRWEB) November 25, 2003 -- Andrew McCausland, managing director of the McCausland Group, announced the launch of a study to develop practical applications of Daniel Kahneman's 2002 Nobel Prize winning studies in Behavioral Finance, for the financial services industry.

The McCausland Group Study will be led by Jerry Prochazka, a founding partner and the chief executive of Chicago-based KPS Consulting, LLP, with cooperative involvement from Vern Hayden, CFP, CLU, Hayden Financial Group, which is headquartered in Westport, CT.

The primary goal of the study is to develop a model that will allow for the practical application of Kahneman's studies, including Prospect Theory, and other behavioral theories for use by our financial advisors. Kahneman's research focused specifically on areas concerning decision-making under uncertainty and human perceptions and judgments.

Andrew McCausland, managing director of The McCausland Group, stated, "During the ¡¥dot.com' craze and other prior periods of intense market volatility, we all saw how the power of emotions drove investment decisions. Unfortunately, the traditional fact finding tools and risk tolerance questionnaires of our industry could not adequately account for clients' behavior. This put financial advisors in a reactive position at a time when clients needed leadership.
    
"It is our goal, to use the studies of Kahneman and others to create a model and questionnaires that will better identify and predict financial behavior of clients, before the next period of major market volatility. The model will also be used to educate clients on their financial behavior and help them evaluate their financial planners," Mr. McCausland concluded.

The study and subsequent model has the following goals: 1) Help our financial planners better understand their clients in an effort to build successful, long-lasting client relationships; 2) provide our financial planners with an effective set of tools to diagnose clients' motivations, biases, and decision making processes; 3) enable our financial planners to deliver just-in-time, personalized education to clients; 4) Better predict certain client behaviors based on information from client interviews and questionnaires, and 5) develop better tools to prevent negative client behavior (i.e., not following a specific financial plan).

In an October 9, 2002 press release issued by Princeton University, the Royal Swedish Academy of Sciences cited Kahneman "for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty. Kahneman's work has laid the foundation for a new field of research by discovering how human judgment may take shortcuts that systematically depart from basic principles of probability."

The Princeton release quoted Kahneman as saying, "The paradigm of the rational actor has not been thrown out. But I think there is now a broader range of thinking about certain issues, especially savings behavior and participation in the stock market. There are certain phenomena in macroeconomics, especially concerning equity markets, that are very hard to understand without relaxing the rational actor model and relying on some psychological influences."

Andrew J. McCausland, Managing Director of The McCausland Group, has over 15 years of experience working with institutional and individual investors. He has earned the Certified Financial PlannerTM (CFP„¥), Chartered Financial Consultant (ChFC), Certified Life Underwriter (CLU) and Accredited Asset Manager Specialist (AAMS) certifications. The McCausland Group is a Chicago-based financial planning, investment advisory firm dedicated to helping successful business owners and individuals fulfill their financial future through hand-tailored financial strategies. The McCausland Group specializes in Advanced Wealth ArchitectureTM, a proprietary client approach that incorporates sophisticated wealth strategies and personalized tools, including the Client Blueprint.    

Jerry Prochazka is a founding partner of KPS Consulting, LLP and the firm's Chief Executive. Jerry has over 15 years of experience as a business consultant specializing in the area of knowledge management. He has provided educational training and knowledge management programs to Fortune 500 companies and non-profit organizations. His undergraduate experiences were with the US Navy and Old Dominion University. He attended graduate school at the University of Chicago. KPS Consulting, LLP created and is committed to Beyond SolutionsSM, a proprietary consulting approach developed by KPS to surpass the generic solutions of knowledge management. KPS' dynamic and flexible methodology combines scientific research methods with business best practices. Though this approach, KPS delivers highly-tailored, innovative solutions in a timely manner.

Vern Hayden, CFP, of Hayden Financial Group, has over thirty-five years in private practice, specializing in portfolio management with mutual funds and retirement planning. He regularly appears as an expert on MSNBC, CNBC and in The Wall Street Journal; and has been a frequent contributor to the financial press, including CNBC.com and TheStreet.com. He has been a board member of the CFP Board of Standards and has chaired the National Endowment for Financial Education, former parent organization of the College for Financial Planning, which created the CFP designation. Back in 1987, Vern was the Founding President of the IAFP Westchester - Rockland Chapter. He recently co-authored "Getting an Investing Game Plan: Creating It, Working It, Winning It."

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For Additional Information:
Spencer Maus      
JASE Consulting & Communications
312-595-1914
jsmaus@rcn.com

Andrew McCausland
The McCausland GroupTM
312-337-4999
andrew@mccauslandgroup.com
www.mccauslandgroup.com

Jerry Prochazka
KPS Consulting, LLP
773-735-8840
jprochazka@kpsconsulting.com
www.kpsconsulting.com
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