When should an advisor moderate versus adapt to a client bias?

Two inputs decide it: the bias type (cognitive or emotional) and the client's wealth relative to lifestyle and goals.

The framework most CFA candidates use:

• Cognitive bias and modest wealth: moderate. The cost of the bias is high relative to the cost of correction, and the bias is reachable through education.
• Cognitive bias and high wealth: moderate, but with less urgency. The mistake matters less if the cushion is large.
• Emotional bias and high wealth: often adapt. The client can afford to express the bias, and pushing damages the advisor relationship.
• Emotional bias and modest wealth: nuanced. You cannot let an emotional bias compromise the financial plan, but confrontation rarely works. Slow education and structural changes (automatic transfers, written investment policy statement, charitable structures) are usually better than direct argument.

A typical exam answer also names a specific action, not just "moderate" or "adapt." For example, adaptation for a concentrated stock might mean a collar, a charitable remainder trust, or a multi-year rule-based liquidation, depending on which fits the facts.