How To Understand Neuroscience To Gather More Assets
July 14, 2015
By Dan Solin
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Brokers are largely successful in selling inferior or conflicted services because they have superior sales skills. Bridge this gap and level the playing field by understanding the role that neuroscience plays in the decision-making process.
Nothing replaces expertise. I applaud advisors who seek to refine their skills by attending conferences and obtaining certifications. What’s more, I find myself consistently struck by the high level of competency and ethical commitment I observe in my dealings with advisors. Prospects are in the enviable position of selecting an advisor from among a large group of highly skilled professionals.
There has been heartening progress in the investing public’s shift toward choosing the services of registered investment advisors (RIAs), who are fiduciaries to their clients. It’s frustrating, however, that so many investors continue relying on advice from brokers who are permitted to resolve conflicts of interest in a manner that generates more income for their firms and lowers expected returns for their clients.
Here’s a critical finding that illustrates the value of understanding neuroscience:
We are lazy
Studies demonstrate that, when confronted with a decision, we typically look for the quick, easy solution. The more effort you ask a prospect to expend, the less likely he or she is to change. This has been shown in studies (referenced here) related to changing diet and starting an exercise regime.
One of the first things your prospects will focus on is how much time and effort is required to make the decision. Research indicates that they will seize on relatively minor details in making this initial assessment.
In one study, participants were presented with directions in both Arial and Mistral fonts for preparing a recipe. The Arial font was much easier to read. Participants given the instructions in Mistral font reported that completing the recipe would be more time consuming, would feel less “fluent and natural” and would require more skill.
As a consequence, they were less willing to complete the task than participants who were given the same recipe in the easier-to-read font.
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