Financial analysts do not believe markets work efficiently in responding to new information and it often makes more sense to study behavioural patterns instead, a report said.

The Chartered Financial Analysts Society, in a study of its members' views, found that 77 per cent of respondents do not believe market prices reflect available information and believe that investors behave irrationally as individuals. More than two-thirds said they also do so in aggregate.

Behavioural finance won more support from the 438 respondents. Most see it as a useful addition to modern portfolio theory - 86 per cent - although 76 per cent agree that it is not yet sufficiently robust to replace modern portfolio theory as the basis for investment thinking.

"The crisis has damaged confidence in the efficiency of the market. It’s hard to make the case that market movement during the last year has been the result of rational behaviour at all times,” Will Goodhart, chief executive of CFA Society, said.

“The subsequent, understandable bias against the idea of market efficiency has been reinforced by a better and broader understanding of behavioural finance theory and it will be interesting to see how modern portfolio theory and behavioural finance develop over the next few years,” Mr Goodhart added.

The society represents about 8,000 analysts in the UK.