Use Oxytocin to Gather More AUM
November 11, 2014
by Dan Solin
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
An obvious, but essential, step on the path to gathering more assets under management (AUM) is persuading prospects to become clients. Many advisors understandably focus on refining their financial expertise so they can become better advocates for the services they offer.
But while competency is critical to your success, understanding how prospects make decisions is more important. Understanding the role of a chemical compound produced by your brain – oxytocin – will give you a tool to emotionally connect with prospects.
What does oxytocin do?
Oxytocin is a hormone created in the hypothalamus, a gland located in the brain. The role of oxytocin in social relationships is not completely understood, but the research is intriguing.
Oxytocin reduces stress and promotes social bonding. Swedish physiologist Kerstin Uvnäs Moberg has studied the physical and psychological effects of oxytocin on human interactions. She published her findings in the book, The Oxytocin Factor: Tapping the Hormone of Calm, Love and Healing.Uvnäs-Moberg found that an increase in the level of oxytocin reduces aggression and promotes social bonding. When oxytocin is injected into animals, it stimulates maternal behavior. It also lowers blood pressure.
How is oxytocin increased?
Levels of oxytocin increase when we are physically touched. Researcher Paul Zak demonstrated that “emotional proximity” also increased levels of oxytocin. In a now famous experiment, he measured the levels of oxytocin in a bride, members of the bridal party and guests before and immediately following a wedding service. He found increased oxytocin levels not only in the bride’s blood, but also in the blood of the bridal party and those attending the service.
The emotion surrounding this happy event triggered an increase in oxytocin, which in turn created a more powerful social bond among all those participating in the wedding. Zak called oxytocin “the moral molecule, the chemical that makes us good.”
How does oxytocin affect our behavior?
In her work, Uvnäs-Moberg referred to a study showing that people who borrowed books from a library were more likely to return them if the librarian touched them lightly at checkout.
Another study aimed to test the idea that people under hypnosis will not engage in behaviors that they wouldn’t have otherwise. Participants were divided into two groups. One group was given a placebo and the other was given oxytocin. Both groups were then hypnotized and asked to engage in “socially unorthodox behaviors,” like swearing, singing out loud and dancing in response to a posthypnotic cue. The study found that participants who received oxytocin were significantly more likely to swear and dance than those who received the placebo.
Remember, if you have a question or comment, send it to [email protected].