For financial advisors who want to incorporate the theories and principles of behavioral finance into their practices, finding applicable solutions is often a challenge.

There's no question that advisors who want to do things right with respect to behavioral finance have to be knowledgeable of the science behind it, says Richard Peterson, managing director at San Francisco-based behavioral finance research and consulting firm MarketPsych, but more importantly, they need to be able to work with user-friendly methods and tools that allow them to apply behavioral finance to every day, real life.

While Peterson's entire body of work is based on the research he's done in the field of neuroscience (which in its avatar of neurofinance is arguably the bedrock of behavioral finance), his firm, MarketPsych, has maintained a singular focus on the applicability of behavioral finance. Since the crisis, it has become even more clear that markets, the people in them and the plans that are created to get the best of them are not always rational, and irrationality as a product of what happens in "that big black box that's our brain," has to be taken into account to understand why people do what they do and to prevent them from making mistakes, Peterson says. But being able to help in the right way also means that advisors need to have the right tools at hand, he says, and this is where firms like MarketPsych come in.

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