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Modeling Psychology in Islamic Wealth Management

Author

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  • Ahmed Hamed Al-Abbadi
  • Adam Abdullah

Abstract

This paper proposes a conceptual framework for modeling psychology in Islamic wealth management. Incorporating psychology into finance would significantly contribute to our understanding of the behavior of individual investors as well as market behavior. Utilizing the findings of behavioral finance and financial therapy, along with industry megatrends, Islamic wealth management could step further in fulfilling its ultimate objective of promoting social welfare. This is can be achieved by exploring and identifying the psychological factors that affect the clients¡¯ decision-making and then behaviorally and cognitively helping them to engage in socially-responsible investments, projects and initiatives. In operationalizing this model, financial advisors/wealth managers should adopt a comprehensive client discovery and profiling method and apply Fintech innovations in producing complex analytics and thereby enriching the client experience.

Suggested Citation

  • Ahmed Hamed Al-Abbadi & Adam Abdullah, 2017. "Modeling Psychology in Islamic Wealth Management," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(10), pages 64-85, October.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:10:p:64-85
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    References listed on IDEAS

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    More about this item

    Keywords

    Islamic finance; wealth management; psychology; behavioral finance; financial therapy;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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