How To Use A Prospect’s Biases To Your Advantage
July 21, 2015
by Daniel Solin
ValueWalk's Raul Panganiban interviews JP Lee, Product Managers at VanEck, and discusses the video gaming industry. Q4 2020 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview With VanEck's JP Lee ValueWalk's ValueTalks ·
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Jiu-jitsu is a gentle art. Instead of meeting force with greater force, skilled practitioners use their opponent’s force against them. Advisors can learn a lot from this principle.
We are all familiar with the behavioral finance research demonstrating that investors possess a number of biases that influence their decisions, including whether or not to hire a particular advisor. Understanding these biases and using them to your advantage will optimize your close rate.
Here are some common biases and recommended strategies for making them work for you:
We have a tendency to believe that people who are similar to us in ethnicity, religion, social status and profession are more likable and trustworthy.
You can use this bias to your advantage. If you have a choice between equally qualified advisors, consider having the advisor in your office with the characteristics most like your prospect represent your firm at the meeting.
I recently had an experience that validated this advice. A client of my coaching practice had a young, but very professional, advisor meet with a couple that was nearing retirement. Following the meeting, the prospects decided to retain another firm.
My client asked the prospects if they would consent to be interviewed by me in order to get a better understanding of the basis for their decision. They agreed. They told me that they met with the senior vice-president in charge of wealth management at another firm. They thought this firm “took them more seriously.”
This couple was influenced by ingroup bias. They found it easier to relate to someone their own age.
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