Behavioural theories of finance and economics have received little academic attention until recently. Nevertheless, behavioural theories of investor behaviour can be directly applied to categorization of investors and prediction of future behaviour. The purpose of characterizing and predicting future behaviour is to ensure allocation of appropriate corporate resources to meet the needs of clients as effectively as possible. This research specifically focuses on segmentation and predictive modeling of retail clients at Phillips, Hager & North Investment Management Ltd. Segmentation is undertaken through cluster analysis of investors based on transactional and performance data. Subsequent logistic regression and seemingly unrelated regression models are developed to determine if investment personality - through Know-Your-Client (KYC) information - and demographics have an explanatory and predictive relationship with future investor behaviour.

Behavioural theories of finance and economics have received little academic attention until recently. Nevertheless, behavioural theories of investor behaviour can be directly applied to categorization of investors and prediction of future behaviour. The purpose of characterizing and predicting future behaviour is to ensure allocation of appropriate corporate resources to meet the needs of clients as effectively as possible. This research specifically focuses on segmentation and predictive modeling of retail clients at Phillips, Hager & North Investment Management Ltd. Segmentation is undertaken through cluster analysis of investors based on transactional and performance data. Subsequent logistic regression and seemingly unrelated regression models are developed to determine if investment personality - through Know-Your-Client (KYC) information - and demographics have an explanatory and predictive relationship with future investor behaviour. / Business, Sauder School of / Graduate