The Endowment Effect And Its Role In Portfolio Management, With Meghaan Lurtz

Sometimes clients will want to hold on to a particular portfolio investment or piece of real estate (or value it at much more than the market indicates) even though selling it might make financial sense. In this episode, we explore the endowment effect, a powerful behavioral bias that causes people to value what they already own more than what the market suggests it is worth. Joined by behavioral finance expert Meghaan Lurtz, we unpack three core drivers behind this bias (loss aversion, ownership identity, and reference price anchoring) and how each one shows up in real financial planning conversations. Listen in to hear why logic alone rarely convinces clients in this situation, how emotional attachment can distort decision-making, and what advisors can do to guide clients toward better outcomes without dismissing their attachment to these assets. You'll learn practical communication tools and powerful questioning techniques that help clients reflect, reframe, and confidently move forward with their financial decisions. For show notes and a full episode transcript visit: www.kitces.com/FAT3 Click here to learn more about becoming a Kitces.com premier member.