Emotional intelligence and the human side of financial decisions

A COVER Mindshift webinar

Host, Tony van Niekerk, Editor of COVER

Guests:

• Mark Baker, Emotional Intelligence Expert and CEO of mygrow
• Paul Nixon, Behavioural Finance Specialist, Momentum Investments

When knowing isn’t enough – The session opened with Tony van Niekerk setting the tone for the conversation: “In financial decision-making, logic isn’t always king, emotion is often the silent driver.’ The webinar aimed to explore how emotional intelligence (EQ) and behavioural finance intersect and why this matters in both personal and professional financial decisions.

Tony was joined by two experts who brought unique perspectives:

• Mark Baker, a pioneer in emotional intelligence training and leadership development.
• Paul Nixon, a behavioural finance authority who studies how people behave in markets, and why they often make irrational choices despite having all the “right” information.

Understanding the basics – The first segment focused on foundational definitions. Mark Baker described emotional intelligence as the capacity to understand, regulate, and express one’s emotions, while also perceiving and influencing the emotions of others. In finance, he argued, EQ is essential because clients are rarely making decisions based solely on numbers, they’re navigating fear, uncertainty, grief, and ambition.

Paul Nixon followed with a primer on behavioural finance, describing it as the study of how psychological influences and biases affect financial behaviour. Some of the most common traps include:

• Loss aversion – where people fear losses more than they value gains.
• Herding – following the crowd, even when it’s irrational.
• Overconfidence – a tendency to overestimate our own knowledge or forecasting ability.
• Present bias – preferring immediate rewards over long-term benefits.

Both experts agreed: financial decisions are rarely purely rational, and emotions often override intellect.

Where EQ meets behavioural finance – In the second segment, Tony asked how these two domains interact in real-world decision-making.

Scenario 1: Panic-selling during a downturn

Paul explained this as a textbook example of loss aversion and availability bias, recent market headlines trigger fear, leading investors to sell prematurely to “stop the bleeding.”

Mark added that in such a moment, an emotionally intelligent investor or adviser would recognise their internal panic signals, pause, and re-centre. EQ acts as a circuit breaker, interrupting the fight-or-flight response and allowing a more deliberate decision.

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Scenario 2: Overconfidence during a bull market

Here, Paul described how rising markets fuel confirmation bias, we look for information that supports our belief that we’re right and dismiss data that challenges it. Mark highlighted the importance of self-awareness, a key EQ skill, to catch this bias in real time and question one’s assumptions.

“It’s not just about knowing the market. It’s about knowing yourself.”

The adviser-client dynamic – Next, the discussion shifted to financial advisers and how EQ and behavioural finance play out in client relationships.

Mark shared examples from the advisory world where clients face emotionally charged scenarios, bereavement, divorce, retrenchment. In these moments, clients are not looking for spreadsheets; they’re looking for reassurance, clarity, and emotional grounding. Advisers who exhibit empathy, listen actively, and mirror emotional cues are better positioned to build trust and guide decision-making.

Paul cautioned that advisers themselves are not immune to pressure. Under stress, advisers may fall into persuasion traps, pushing a solution rather than co-creating one with the client. Biases such as status quo bias or framing effects can lead to poor communication or mismatched advice.

Tony reflected that emotional intelligence is not just a client-facing tool, it’s a self-management skill that protects advisers from becoming reactive or overly directive.

Practical strategies for building EQ and managing bias – This was arguably the most actionable part of the webinar.

Mark Baker outlined several proven tools to build emotional intelligence:

• Mindfulness: Learning to observe thoughts and feelings without judgment, allowing better emotional regulation.
• Journaling: Reflecting on emotional responses to financial or interpersonal situations can create self-awareness patterns over time.
• Feedback loops: Seeking input from colleagues or clients helps identify blind spots.
• Coaching: Structured conversations that challenge self-perception and build relational intelligence.

He emphasised that EQ is not fixed, it can be cultivated with intentional effort.

Paul Nixon shared behavioural strategies to avoid falling into cognitive traps:

• Pre-commitment devices: Agreeing upfront on a financial course of action helps avoid impulsive changes during emotional periods.
• Checklists and structured decision frameworks: These reduce the likelihood of biased, gut-based decisions.
• Nudges: Subtle changes in how options are presented can guide better client behaviour without removing choice.

Together, they reinforced that EQ and behavioural strategies are complementary, one strengthens awareness, the other supports structure.

The human edge in an AI world – Tony posed a forward-looking question: With the rise of robo-advisors and AI, will emotional intelligence still be a human advantage?