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An adviser believes a listed property trust is undervalued. When reviewing research, she notes the reports that support her view and dismisses two negative ratings as 'too cautious'. Which bias is she MOST likely showing?
Confirmation bias is the tendency to seek out and give weight to information that supports an existing belief while discounting contrary evidence (Pompian 2012; Plous 1993, both on ASIC's Exam preparation guidance v6.0 reading list). Favouring supportive reports and dismissing negative ratings fits that pattern. For an adviser, it undermines the reasonable investigation and objective assessment the best interests duty requires (Corporations Act 2001 s961B(2)(e)).
Anchoring is over-reliance on a starting value; the key here is filtering evidence to fit a prior view.
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