If you could only pick one of the below criteria to choose a romantic partner, what would it be?
- Their values
- How they get on with the people most important to you
- Their annual income
- Their body mass index
This list contains examples of two ‘thinking styles’.
In behavioural science terms, options 1 and 2 are what we call affective thinking.
We tend to consider this style of decision-making as ‘going with our gut’ or ‘following our heart’. We base these decisions on how we feel.
On the other hand, options 3 and 4 are what we’d class as analytical thinking. This decision style is made using our heads by processing factual, objective information.
Now of course most people would tend to pick either option 1 or option 2 as criteria for picking a romantic partner – particularly if they knew their answers were going to be made public…
That’s because it’s common to view romantic decisions as the type best-suited to affective thinking.
Why does this matter to financial advisers?
When it comes to financial decisions, the opposite applies. Compared to nearly every other decision-making area, research shows that finances are perceived to require analytical – rather than affective – thought*. It doesn’t feel appropriate to most individuals to let their hearts and guts guide them.
But experienced advisers reading this will know that, although analytical thinking is clearly important when it comes to making the right financial decisions, it’s not the only thing at play. Clients also need to reflect on their goals, responsibilities, worries and anxieties too. Truly holistic advice touches on both sides of this affective-analytical coin.
And here lies the problem.
Most prospective clients would get immense value from broad life planning conversations with their adviser, rather than one confined to portfolios and products. But if they’re not used to having deeper, more meaningful conversations with a financial adviser, this type of discussion might feel uncomfortable. They won’t see the full value in what you do.
To make your value obvious, we first need to make sure they’ve bought into the concept of advice, which goes beyond the pounds, pence, dollars and cents.
We need to change the opinion of financial matters as a purely analytical topic and help people embrace the emotions that are really influencing their financial behaviour.
Learn how to position your financial advice services
If you’re interested in attracting more of your ideal clients, focussing your marketing efforts in the right areas and reducing the need to justify your fees to clients and prospects, take a look at my new webinar: ‘The Three-Step Solution to Positioning Your Financial Advice Offering‘.