We all hate to lose and here's why


A curious phenomenon

On 21 January 2021, the US Mega Millions lottery announced their top prize: a whopping $970 million [1]. What are the odds of winning the top prize?

1 in 302 million [2].

Despite the near impossibility to win, 50% of adult Americans have played the lottery before [2].

People ignore the odds.

Nobel Prize-winning psychologist and economist, Daniel Kahneman, and his co-author Amos Tversky developed the model, Prospect Theory, to explain this strange behavior.

What is Prospect Theory?

Prospect Theory is a decision theory that explains how people’s decisions are influenced by their attitudes toward risk, uncertainty, loss, and gain.

Under the umbrella of Prospect Theory, Kahneman and Tversky pointed out that humans tend to over-estimate the chance of an event happening [3]. This observation rides on the research of another Nobel-prize winning economist and cognitive psychologist Herbert Simon who suggested that humans are unable to think objectively due to influences such as information inadequacy, social pressures and individual motivations.

Compounding the human’s poor ability to assess chances (or probabilities) is the universal observation that humans feel the pain of loss more than the joy of gain. Losing five dollars hurts more than chancing upon five dollars causing people to be averse to loss. This loss aversion motivates one to make decisions to avoid the pain associated with loss.

What if there is nothing to lose?

In the lottery context, the only “loss” is the lottery ticket cost, which is negligible for most people as long as they are not compulsive gamblers. The “what if I could have won” notion outweighs the failure to win the lottery, which might be a subconsciously expected outcome anyway. Hence the allure of huge financial upside dominates people’s thinking, even though the likelihood of winning is minute.

When there is too much to lose

Yet, on the other end of the loss spectrum, people’s decision-making process is complicated by options. It is no coincidence that the term “prospect” originally (and aptly) referred to the options available.

If people face two options, one is a near-certain loss while the other a tiny chance of a gain, they become strongly motivated to take the latter option, in the hope of getting the gain and avoiding the pain of loss. In this context, people become risk takers. They go “all-in”.

Entreprenuers frequently display this classic decision-making behavior. In Singapore, it has been reported that many entrepreneurs from the food and beverage industry, despite having incurred losses amounting to millions due to COVID-19 measures restraining operations for over at least twelve months, feel they have no choice but to persist, even dipping into their personal reserves. As some of them remarked, “I can’t stop now because I have already lost so much”  [4].

However a different set of options can present the same perception of “much to lose”. Imagine having to choose between two options: To receive a guaranteed winning or to take a chance for a higher winning amount but also accompanied by a slim chance of getting nothing. Most of you would opt for the guaranteed winning. We mentally exaggerate the “slim” chance of getting nothing so much so that the thought of losing something so close at hand is unbearable.

Such loss aversion also means that humans like certainty, so that they can keep a lid on their exposure to chances of loss.

Hence, we buy insurance

Since humans do not resonate well with uncertainty and yet over-estimate low probabilities of a financial loss, it is certainly stressful for us, Homo sapiens. Hence, we rely on insurance to eliminate the uncertainty of looming losses.

We see this in the type of insurance that people prefer to buy. For a peace of mind, consumers would rather pay a higher premium for a policy with complete coverage than a cheaper policy with only partial coverage and an out-of-pocket component that they must pay themselves [5].

As we understand how we Homo sapiens are wired to make decisions, it begs the question: What is the end goal of the, somewhat irrational, choices that we make?

We all like a stress-free and happy life

Contrary to popular wisdom, humans do not pursue wealth just for money’s sake. Ultimately, the end goal for most is to be able to cope with any loss-related crises and yet fulfil their aspirations, i.e. a stress-free and happy life on self-defined terms.

In 360F, we recognize that goal, especially on the financial frontier. Hence, our proprietary scoring system known as 360-HappiU© follows the fundamentals of the Prospect Theory to measure your personal financial satisfaction.

Through 10,000 stochastic simulations, we measure your HappiU© by stress-testing your financial future against every conceivable personal and market risk so that you can reach your life’s goals while weathering through financial storms.

After all, we all hate to lose.


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 [3] Kahneman, D. & Tversky, A. (1979). Prospect theory: An analysis of decision under risk by Daniel Kahneman and Amos Tversky. Econometrica. 47(2).


[5] Johnson, E. J., Hershey, J., Meszaros, J., & Kunreuther, H. (1993). Framing, probability distortions, and insurance decisions. Journal of Risk and Uncertainty. 7(1), 35-51.


Keeping Scores – Good or bad? Psychology experts say it’s good for you


A new food trend is on the rise. Health- and environmentally-conscious people are embracing food innovations, such as plant based meat and scoring systems that measure our meal’s dietary risk and shows how we can reduce carbon footprint. [1]

Why do we even need scoring systems?

Why do we need a scoring system to monitor our diet? This question should, however, be asked in a bigger context as we use scoring system in all aspects of our lives.

From debt credit scores that measure credit rating to social credit scores that blacklist socially inappropriate behavior [2] , there’s something about point-scoring that’s intrinsic to us. Why is that so?

Being in school for a decade or two meant that most of us have been perpetually exposed to a scoring or grading system that reflects academic aptitude. We are inadvertently indoctrinated to use scores as a reference to measure competency.

However, our relationship with the scoring system is a far more intrinsic one.

We all want to feel competent

Do you remember the feeling when you did well for a particular test? Whether it was a driving or school test, that incredible sense of achievement makes you want to continue to ride on that high.

An empirical motivation theory, termed as the Self Determination Theory, explains this feeling. Self-determination refers to each person’s ability to make choices and manage their own life. In a journal article cited 6,930 times in the research community, “Self-determination theory: a macro-theory of human motivation, development and health”, the authors, Edward Deci and Richard Ryan, both psychology professors, describe how we have the psychological need to be competent and hence, take steps to grow our area of proficiency. When we score well, we feel accomplished even if there is no one we are comparing ourselves with. An external stimulus, namely the favorable score, causes us to feel good.

That is how the scoring system motivates us. Through empirical research, Deci noted that mere feelings of competency will not motivate one to improve self-determination unless it is supported by external feedback [3], such as the scoring systems. We are motivated to maintain or exceed our own score to reaffirm our innate need to feel competent. Hence when given positive and feasible feedback through a trusted scoring system, we need no prompt to follow the feedback to improve our score.

But scoring systems run the risk of being irrelevant and impersonal. Scoring systems must account for individual values, beliefs, and lifestyles, without which they will merely serve as arbitrary references that find no resonance or value with the individual person. Sadly, many financial ratios and metrics lack this personalization which is the very key to financial advisory. This hinders engagement and trust-building between customers and organizations. It also disempowers people from taking steps to grow their competency and satisfaction. Hence, 360F develops a financial scoring system pertaining to your financial happiness defined on your own terms.

It’s your personal financial happiness we care about

The proprietary scoring system, 360-HappiU©, is the scoring benchmark for personal financial satisfaction. The score known as the HappiU© forecasts the person’s ability to cope with personal crises and yet achieve their financial aspirations. This scoring system is robust as it involves stress-testing the person’s future through some 10,000 scenarios based on his personal probabilities of personal and market risks. Through this, your HappiU© score will be personalized to your needs, priorities and lifestyle.

We expand the HappiU© functionality with insights that emphasizes feasible action points to help you raise or maintain your score. By offering positive and actionable feedback, you can now take feasible steps to boost your competency level and find personal satisfaction: a sign of a truly self-determined person.

As scoring systems affirm our intrinsic need for competency, 360-HappiU© will be the future’s ubiquitous reference for satisfaction in your financial capability. After all, you were made to be and feel competent.

As you feel financially accomplished, you are empowered to chart your own financial journey and stay the top, always.


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[1] Eaternity Database, 2017


 [3] Sailer, M., Hense, J.U., Mayr, S.K. & Mandl, H. (2017). How gamification motivates: An experimental study of the effects of specific game design elements on psychological need satisfaction. Computers in Human Behavior, 69 (371-280)


The Day of a productive Financial Advisory Professional


David is a financial advisor. While his peers begin their day with cold calling and emailing the latest product campaigns, David invites his prospects to complete a simplified financial self-discovery exercise at their own pace. David pre-empts them that the exercise gifts them a scoring mechanism that measures their likely financial satisfaction in the hope of achieving future financial independence.

The score calculated by the mechanism, is known as the HappiU. It is a transparent metric that reflects the prospect’s ability to weather through a financial crisis like critical illness and yet achieve his/her financial goals. It also measures the impact of any suggested financial advice.


The HappiU score is central to trust building in the advisory relationship. Just like how the navigation software enables us to trust strangers to bring us to our destination in their private hire cars, the HappiU score ensures both the prospect and the advisor share the same referencing system that is intuitively and mutually understandable. A prospect empowered to understand and discuss his current net worth and financial gaps is one who will develop buyer intent to improve his situation. Buyer intent fuels the advisor’s interaction with the customer. The stronger the intent, the easier it is for advisor to engage the prospect productively and bring customer satisfaction.

David’s day has a good start and gets even better. The self-discovery exercise generates a bundle of personalized and recommended insurance plans, and showcases how these insurance policies can improve the prospect’s HappiU score. This self-directed functionality gives prospects a sense of control. Unlike the boomer generation who readily accepts the expert authority of the financial advisor, the current millennial generation resists the monologue of information transfer from their financial advisors. By guiding prospects to discover the information and enabling them to understand it, advisors find themselves in an effective collaboration with their prospects to reach a consensus easily. The self-discovery financial exercise has not only empowered the prospect but also David to save the time which would otherwise be wasted on overcoming objections from prospects who have yet to develop any buyer intent.

Most customers want to be included in the decision-making but few will want to venture alone. David now spends most of his day guiding his prospects through the sales process. Seeing is believing but in the world of financial advice, advisors and prospects must grapple with unforeseen events. However, David has a visual financial simulator at his disposal, a powerful and credible foresight tool that analyzes and visualizes the prospect’s personal and market risks based on probability to project the lifetime net wealth. Using the tool, David demonstrates how the recommended insurance solutions enables the prospect to cope with bad times and achieve his defined financial goal of financial independence.


On some days, David encounters prospects whose true concerns surface only during an in-person or the insurance sales process. David is free to modify the recommendation options generated in the self-discovery exercise. Staying on the same platform, he customizes the solutions – from comparing different insurance and investment features in a single view, to configuring the individual insurance policies and simulating their impact on the prospect’s financial satisfaction. Also, he can take in his prospect’s special requirements such as Environmental, Social, and (Corporate) Governance (ESG) preferences and customize an optimal investment portfolio. As the platform helps David to stay within reasonable assumptions and suitability rules, he minimizes the chances of having to re-work his proposals or getting flagged for compliance issues during audits.


Supported by robust and intuitive automation tools, David relishes his career as a financial advisor. His sales success is sustainable. He enjoys interacting with his prospects and customers and the best part – the feeling is mutual.

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Why are Financial Advisors so stressed?


I’ve been a financial advisor for two years. Financial advisory is an enriching journey, and every job has varying stress, but this is different. The stress was clearly reflected in my lack of sleep and weight gain (ten kilos, to be exact). Financial advisors are highly stressed than other professionals but why is that so?

Jack of all trades

The financial advisor wears multiple hats in this job. From the onset, he is the lead generator, marketer, salesman and servicing personnel all in one. Most come into the job not knowing how to do any of these. The initial learning curve is hence very steep. Coupled with the pressure to break the egg, the journey proves to  be more overwhelming than expected.

Do we really expect the average financial advisor to be savvy with product differentiation and product knowledge and sell these products, right after a two-month crash course? What about investment market trends? Speaking of sales, is the advisor then really advising or selling? Compounding these issues with management KPIs makes advisor’s role challenging.

“Give us this day our daily dough.”

Most advisors are remunerated on a commission-basis. Before you imagine a huge pipeline of customers and a fat bank account, think again. Sales is cyclical meaning there will be good and bad months. Without a basic salary and consistent sales, this leads to an unstable income with physical needs on the line. Will this be solved by merely securing more appointments? Is it sustainable? Unlikely.

Many advisors start off by reaching out to their social circle, known as their warm market. At some point, they will exhaust their warm leads and reach out to the cold market. Cold-calling and canvassing are common prospecting ways which are notoriously ineffective. Reckon this: will you actually entrust your money to a stranger whom you’ve met for barely five minutes?

In developed markets like Singapore, insurers are constantly competing for a bigger share in a market where most people would have basic insurance coverage. The struggle then involves up-selling products on top of what most people already have, blurring the line between boosting one’s financial portfolio and mis-selling. This is a potential compliance risk where advisors can face ethical conundrums here.

In general, many have a subconscious aversion towards advisors since people are typically wary towards sales personnel, making advisors even more desperate. The end result? A stigmatized industry. We perceive financial advisors as pushy, and unscrupulous because these traits are fairly common even as obnoxious and aggressive sales tactics prevail.

Flexing is abs-olutely uncool

Familiar with “successful” advisors flashing their BMWs and Rolexes on social media?  All these flexing is part of personal branding and wrongly assumes that trust is given because of the advisor’s “success”. However, this success is only defined superficially and materially which kills relational trust. The ultimate question begs to be asked:

“Is the advisor selling this because I need it or am I merely enabling his flexing?”

Using successful consultants as role-models to emulate, insurers often dangle ridiculous wealth before success-hungry advisors as an attainable goal. For most people, this is a lie. By juxtaposing these elusive ambitions with present reality, the discrepancy can cause one to be self-beating and perpetuate the desperation-hard sell-rejection cycle.

The double blue tick

Rejection is the advisor’s old-time friend. While it can build resilience, perpetual rejection can be hurtful and damaging for the advisor over the long run. Rejection from a loved one is harder and can be isolating. Detached and labelled, how can the average advisor build trust and bring in the sales? With this emotional tension, no wonder advisors are so stressed.

Finally, don’t cast the first stone

If you meet an advisor, try to be kind. The bad rep is understandable but restrain from casting the first stone. Everyone has their battles to fight, even them. With some luck and discernment, you will find an advisor who truly cares for you and your needs.

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The financial advisor job boom: Is it really sustainable?


According to the Straits Times, retrenchment doubled from 10,690 to 26,110 in 2020 alone [1]. COVID-19 has decimated many jobs in multiple industries, most notably airline and tourism while many companies implemented hiring freezes. As unemployment rose, there was one industry that saw a job boom in the financial services industry with over 2,000 job vacancies across different insurers.

A pandemic-proof industry

The insurance sector grows in a pandemic. Insurance is an essential tool and the pandemic served to further highlight its importance to create market demand. Technology also enables remote sales transactions despite regulations restricting face-to-face interaction. Ultimately, insurers are operating by the law of large numbers by casting their nets far and wide for new advisors. But is the job boom merely due to the industry’s nature per se?

Why are people biting the bait?

It does not take a rocket scientist to understand one’s motivations to join the industry. We simply go back to basic human instinct for survival. With many livelihoods upended by the pandemic, people are desperate. The advisory industry is far more palatable than the other options, as it promises grand dreams, from luxurious incentive trips to attractive five-figure monthly earnings. These lofty goals resonate with human greed and drives many to bite the bait.

Barriers to entry are not prohibitive either. The minimum academic qualifications are a full A’ level cert or a polytechnic diploma equivalent, which makes half of the local populace qualified. Hiring financial institutions further alleviate any fears of cashflow strain by offering a basic salary as an interim compensation before the fresh recruits are deemed fully equipped to earn a wholly commissions-based income. With all these perks, how sustainable is the job exactly?

The Insurance dilemma

In developed markets like Singapore, agent saturation is very high with an advisor to economically-active consumer ratio of 1:117 [2] Odds are, you would have at least one acquaintance or family member who is a financial advisor. The job boom in financial services also means greater competition between insurers, marked by aggressive marketing and sales campaigns.

Joining the insurance industry would probably be a temporal solution to tide through the storm than a sustainable option, especially for mid-career switchers.

Robo rivals 

With technology, a competitor is rising up against advisors selling investment-linked plans: robo advisors. While robo advisors offer liquidity and investment portfolios at a lower cost, this is merely a product-feature comparison. The human advisor’s value lies beyond good product offerings to providing holistic financial advice, which the industry desperately need advisors to do to create sustainability.

What will happen?

When air travel and tourism resume post COVID-19, we envision many people to re-migrate back to these recovering industries. Hence, we can expect higher attrition in the financial services industry. This is harmful for the industry as it upsets advisor-client trust. With automation providing non-biased and sustainable services, clients will deviate from traditional advisory models to technological platforms.

What’s needed for upcoming Advisors and Insurers?

We think this job boom is not sustainable for many reasons. The quality of advice will unavoidably be influenced by sales bias and the advisor’s level of product knowledge. Research has also shown that public trust towards insurers is low.  Eventually, the lack of advice consistency and quality may compromise on customers’ financial decisions and further fuel negative industry perceptions despite regulations being put in check to protect customers’ interests.

We believe insurers need to move away from traditional mass-selling and hiring processes and re-think the role of technology in ensuring congruent and sound financial advice. This may be a small step in the long run to building a sustainable and enjoyable career for financial practitioners.


[1] Source:

[2] Ratio is obtained by dividing number of economically-active people in Singapore by number of active financial advisors. Source:

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