The choice of architecture

Q4.

You often speak about “choice architecture” - designing environments that make better decisions more likely. What might that look like in the context of investing?

The idea of choice architecture stems from Kurt Lewin’s insight that behaviour depends both on the person and their environment. Later, Richard Thaler and Cass Sunstein showed that people never make decisions in a vacuum: the way options are presented always shapes outcomes. In other words, every decision environment has an architecture, whether designed intentionally or not. In finance, good choice architecture helps investors make clearer, more consistent decisions. Examples include:

Temporal structure: Separating long-term allocation reviews from short-term liquidity decisions.
Information framing: Showing performance against long-term goals, not daily market noise.
Decision protocols: Agreeing in advance which signals merit action and which are distractions.
Comparison frameworks: Benchmarking against relevant peers or personal targets, not broad indices.
Scenario planning: Testing “what-if” outcomes in calm times to prepare for volatile ones.

The aim is not to limit autonomy, but to design contexts where long-term values and short-term choices align more naturally. These principles extend to family governance and group decision-making contexts, domains we explored in our Harvard Business Review article on strategies for better group decisions.

Q5.

How can behavioural insights help investors manage information overload and avoid reacting to noise?

Investors today face more information than ever, and much of it is distracting rather than useful. Research, including Kahneman, Sunstein and Sibony’s work on noise, shows that too much information increases variability in judgement and can reduce decision quality. Part of the challenge is our natural desire to create explanations. When markets move, we look for stories to make sense of it, even when those stories have little predictive value.

Philip Tetlock’s research on forecasting demonstrates that even experts struggle to predict outcomes reliably, despite confident narratives. Behavioural insights suggest several practical approaches.

First, distinguish signals from background commentary: a signal is only something that changes your underlying investment thesis or personal circumstances.

Second, reduce the frequency of portfolio monitoring; less exposure to short-term volatility helps maintain long-term discipline.

Third, use predefined decision rules so that action is triggered by clear criteria rather than emotion.

Finally, involve a trusted advisor or counterpart who can challenge assumptions and add constructive friction to the decision process. In short, the goal is not to eliminate information, but to structure how and when we engage with it so that long-term objectives remain the focus.

Q6.

How does a clear decision framework help investors maintain discipline under emotional or noisy market conditions?

The connection between frameworks and discipline is often misunderstood. Discipline is not mainly about willpower. Research on self-control shows that people who appear disciplined usually face fewer tempting decisions in the first place because they have structured their environments to support good choices. This is directly relevant for investing. A framework does not predict markets; it shapes how decisions are made. Its value lies in providing clarity and consistency amidst complexity. To be effective, it must be practical: specific enough to guide actions, yet flexible enough to adapt across conditions. For example, an investor might commit to rebalancing only when allocations move beyond a defined range, or to reviewing strategy on a set schedule rather than reacting to market movements. In this way, discipline becomes less about resisting impulses and more about designing decision processes that make long-term alignment the easier default.

Q7.

Wealth transfers involve not just assets but identity and expectations. How can behavioural science help families navigate the emotional dynamics involved?

The transfer of wealth is rarely just financial; it raises questions of identity, legacy, fairness and control. Family members often hold different assumptions about what money represents, shaped by their own experiences. Wealth creators may see the assets through the effort and risk that produced them, while inheritors often view the wealth more abstractly. As a result, each generation can relate to the same resources in very different ways.

Behavioural science suggests that the key is to make these differing expectations explicit before the transfer takes place. Structured conversations about values, intentions and concerns - while the stakes are still low - help prevent misunderstandings from solidifying into conflict. Discussing hypothetical scenarios is often more constructive than negotiating outcomes in moments of pressure. In many cases, a gradual transfer of responsibility can be beneficial. Allowing inheritors to engage with wealth in stages supports learning and the development of their own decision-making capabilities. The goal is not to impose the previous generation’s approach, but to create conditions in which the next generation can form their own thoughtful and informed relationship with wealth.

Q8.

And finally, what first drew you to behavioural science, and what continues to inspire you about understanding human behaviour?

I’ve always been fascinated by how individual decisions shape markets and society. Traditional economics didn’t explain what I saw in boardrooms and policy discussions - behavioural science did. It revealed that our mental shortcuts and emotional responses, far from being flaws, are predictable features of human cognition, and understanding them allows us to design better decision environments. As Chief Behavioural Officer, I witness the power of these insights daily. Organisations transform when they structure processes and choice architectures to work with human nature, not against it. The human mind fascinates me, not despite its quirks, but because understanding them helps create better outcomes whether in investing, strategy, or public policy.