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Why People Seek Advice

Throughout this book, we’ll be considering the question of why people frequently fail to implement excellent financial advice – the kind of advice that has the potential to benefit lives, permanently and profoundly. But before we dive into those troubled waters, we’d be wise to back up a few steps and consider a more fundamental question: What leads people to seek your advice in the first place?

The question is so fundamental that it often gets overlooked. Getting in touch with the answers can transform how you show up for your clients. It can tell you when to put a relative emphasis on client experience versus technical expertise at differing points of contact with them. Not incidentally, it can also be used to guide your marketing efforts, making sure that they’re targeted at the issues of concern to your potential clients.

Your own reasons for seeking advice

Think of some recent times that you reached out for some counsel. What were you hoping for?

Maybe you needed to confirm something you had already investigated: I think this repair is covered by the warranty. Can you verify that for me?

Or it could have been that you were looking for solutions to a longstanding dilemma: How can I get my dog to stop jumping on people?

Or perhaps you were stuck with a number of complex options that were all emotionally wrenching: What would you do if it were YOUR dad showing signs of dementia?

Or maybe you just needed a perspective that you couldn’t get on your own: Does my butt look big in this muumuu?

Whatever the particulars, you asked for advice because you wanted help in solving a problem. The help you were seeking may have come in one of many forms: information, guidance, reassurance, etc. If that advice met your needs, you left the encounter with a better knowledge of what action to take, what decision to make. If the encounter was helpful, you would have been left with greater confidence and calm. But if that advice did not help you solve your problem, you would have left the encounter feeling just as dissatisfied or unsettled as when you started – or even, unhappily, more so.

Having an unsolved problem creates a state of mental tension; solving the problem allows the individual to return to a state of psychological equilibrium or homeostasis. Returning to a settled state just feels better, plain and simple. Such quietening or settling can occur even when people are asking for help that seemingly has no emotional import whatsoever, and even when they end up rejecting the advice they’ve been given. (We’ll delve into this paradox in a subsequent chapter.) But remember this: All decisions have an emotional component to them. People seek advice to solve a problem so that they can feel more settled.

The wisdom of the collective

Reflect again on your own recent experiences of advice-seeking. Chances are you reached out for advice because you believed it would lead to a quicker, better, more satisfactory outcome than you could achieve on your own. And chances are you would have been correct in that belief. The quality of people’s decision-making is often demonstrably better when they consult with other people.

One of the highest-rated game shows in television history is the international phenomenon, Who Wants to be a Millionaire? The game requires contestants to answer a series of multiple-choice questions of varying difficulty. Any wrong answer results in immediate ejection from the show. When they’re stumped by a question, contestants on that game show have a one-time option of polling the studio audience, and then deciding whether to go with the majority answer or strike out on their own.

I’ve often wondered how much help could be offered to contestants by an audience made up of people from all walks of life. The questions run the gamut from science to history to entertainment and beyond – it’s like a high-stakes version of Trivial Pursuit. So how useful are the collective guesses of a non-expert audience? In their fascinating book, Sway: The Irresistible Pull of Irrational Behaviour, authors Ori and Rom Brafman were able to put an end to my wondering. According to the Brafmans, the audience is correct 90% of the time. That’s far better than the odds the befuddled contestants start out with.

Asking for guidance from a relatively random group of non-expert strangers makes sense if you’re in a time-pressured, do-or-die situation on national television.^* Blessedly, that is a rare event. Most of the time, we’re able to be more discerning about the people we reach out to. That’s a good thing, because the decisions we face are usually a good deal more complex. The answers we seek are not so much cut-and-dried factual ones; they tend to be more nuanced and personalized than that. Nevertheless, the take-home message remains: If we’re looking to make the best possible decisions for our lives, other people are often our best and most important resource.

The common ground of financial experts and tattoo artists

Why do people seek your advice? What is it that people are hoping to get from you, the expert? Until quite recently, the answer would have included access to a product or a body of knowledge not available elsewhere.

There was a time when financial experts had unique and privileged access to the tools and expertise of their trade. If folks wanted to buy insurance, stocks, bonds, or mutual funds, they needed someone to do it for them. This was true of pretty much every profession and trade prior to the mid-1990s. Training and credentials gave experts an exclusive ‘lock’ on such things as procedural training, trade publications, and purchasing and sales rights. Regulatory guidelines helped ensure that knowledge was protected within each profession’s particular guild. It was all proprietary – for tattoo artists and stockbrokers, for welders and insurance salespeople.

Technology has changed all that. With every day that passes, the amount of secret or proprietary information shrinks, and what is considered ‘public domain’ grows. Access to knowledge and products or supplies is steadily being democratized. Want to know the brand of knickers favoured by the Queen? Keen to discover how to get slugs off your lettuce plants? Need access to a trading platform so you can buy some penny mining stocks? It’s all available in seconds with some clicks of a mouse.

I’m not meaning to be indelicate here, but given the above-mentioned changes, the question needs to be asked: What good are you, anyway? Well, a lot of good, as it turns out. Let’s turn to the reasons consumers give when asked why they turn to experts – financial and otherwise.

Why consumers turn to the experts

As you read through the following aims that consumers have in seeking help, give some thought to how you might integrate this knowledge into both your marketing and promotion efforts as well as your service delivery.

To reduce complexity

Because of an inherent belief that more knowledge = better decision making, many people now make a point of gathering copious amounts of information on the problem they’re trying to solve. It is not uncommon for customers and clients to show up with tomes of research they’ve gathered, eager to discuss their findings. But the gathering of information does not automatically turn consumers into experts, particularly when the domain is highly technical and complex. (Just ask any physician who has had to tangle with a patient armed with WebMD diagnoses and treatment possibilities.)

What true experts are able to do is judge the credibility and utility of the available information in order to separate the wheat from the chaff. It takes expertise to accurately classify material as Meaningful versus Irrelevant versus Unmitigated Rubbish. The non-expert does not know how to weigh the relative merits of the information he or she possesses. The loudest voices or the websites with the highest rankings are given too much weight and awarded too much credibility. As a result, material that is useless or plain wrong often has too much influence on the consumer.

Experts help to cut through the noise and locate the signal. This is especially valuable to people who are faced with options that are difficult to compare. Such difficulty can come about because the choices are so similar (e.g. this socially responsible mutual fund versus that other socially responsible mutual fund), or because the choices are so dissimilar (e.g. whether to use monies to launch a new business venture or to enter retirement). The more emotionally impactful the decisions, the more the expert’s value lies in reducing the volume of information and its associated complexity.

To take action

‘Keep your options open’ is a piece of advice we frequently give to teenagers as they consider which courses to take or which opportunities to pursue. It bespeaks our belief that more options = greater happiness.

People like options, it’s true, but they frequently freeze up or bow out when faced with too many of them. One of the cleverest illustrations of that tendency comes from a now-famous supermarket study conducted by psychologists Sheena Iyengar and Mark Lepper in 2000.⁵ Grocery store shoppers came upon a display that contained at different times either 6 or 24 different varieties of jams that they could sample. More variety led to a greater volume of jam sampling, but when the researchers looked at which display led to the greatest volume of jam sales, they found it was the one that offered less choice. The difference, in fact, was startling. Only 3% of customers bought jam after being exposed to 24 options, whereas 30% of visitors to the 6-variety display made a purchase.

The authors attributed the difference to a kind of decisional paralysis that set in as a result of having too many possibilities to sift through. The study spawned dozens of additional ones that sought to explore the conditions under which more options = less action. It has come to inform the field of consumer psychology and has led to changes in merchandising displays. Similar findings have been found in other aspects of human behaviour. For example, lonely hearts are more likely to go on dates when given an array of eight potential partners to select from than when they are shown an array of 20. Whether we’re choosing sweet toppings or sweethearts, it seems we act more decisively when the options are constrained.

A similar phenomenon exists in the world of personal finance, where people often need help to move from mere contemplation into action.⁶ You may be familiar with the ‘snowball’ method of debt repayment (made famous by radio host Dave Ramsey) or the ‘envelope’ method of keeping household expenses in check (made famous by your grandma). One of the reasons for the popularity of such basic approaches to financial management is that they reduce complexity and get people into action quickly. For folks who have been frozen by indecision or overwhelmed at the prospect of where to begin, these simple guidelines offer a quick, safe way to get moving in the direction of financial well-being. ‘Getting going’ leads to considerable spin-off effects in confidence and optimism, and increases the likelihood of similarly desirable behaviour changes in the future.

To save time

You could easily call up a YouTube video and learn all about chicken husbandry; even so, I’ll bet you would prefer to buy a tray of chicken wings over raising poultry in your back yard. And notwithstanding the fact that you could readily find a manual for your particular model of car, I suspect you would rather pay a mechanic to swap out your transmission than be stuck underneath the car for days on end. Most of us will gratefully pay for help that saves us time.

Expert financial advice saves time for people who are too busy, too unskilled, too stymied, or too uninterested to do things for themselves. The timesaving frequently far exceeds just the obvious, up-front benefit. For example, by taking his business taxes to an accountant, it is evident that Fred (a self-employed musician) saves himself an initial eight or ten hours of poring over instructions and filling out forms. What is less evident are the other ways in which Fred has saved time, e.g. by not having to buy his wife flowers to make up for his grumpiness, by not having to meet with personnel from the federal taxation bureau to explain all the errors he undoubtedly would have made, etc. Some of the most important time savings are the ones your clients may never even be aware that you’ve given them. When developing marketing materials, be sure to include the time-saving benefits of your services.

To offload unpleasantness

This reason is closely related to the previous point. Having access to expertise goes beyond cost–benefit analyses involving the relative value of our time versus someone else’s. Access to expertise reduces both stress and drudgery. It’s not just that I would find transmission-swapping and chicken-wrangling to be time-consuming – I would also find them to be difficult, dirty and downright yucky tasks.

In 1993, lifestyle pioneers Joe Dominguez and Vicki Robin published a book that would become one of the iconic, counter-cultural financial advice books of the last century. In Your Money or Your Life, they wrote about the exchange that people make to earn a living: namely, life energy (predominantly in the form of time and talent) in exchange for money. They challenged readers to think more deeply about that transaction, ensuring that the exchange of time for money was truly worth it to them.

Since that book was first published, there has been much scholarly research done to try and elucidate the connection between money and life satisfaction. The findings are clear that there is a positive correlation between the two. The offloading of unpleasant activities contributes significantly to that correlation. Having disposable income allows people to hire others to do those things they’d rather not do themselves. And since ‘Dealing with finances’ is right up there with ‘Having a root canal’ and ‘Waxing the bikini line’ on the list of Things Most People Find Unpleasant, financial experts have something of considerable value to offer to a great many people. (Sigh. If only it were possible to offload root canals and hair removal, too.)

To make someone else happy

Some clients show up in your office solely for the purpose of making someone else happy … or to get someone else off their back. (In my clinical practice, I refer to this as the Parole Officer Model of service delivery.) If you have been in the business for a while, you, too, undoubtedly have had people in your office who are there at someone else’s behest. They may be there to set up a prenuptial agreement, or because they have come into a trust fund, or because they are facing bankruptcy proceedings. They may be the spouses of longtime clients, those silent partners whose names are on all your paperwork but who never darken your door unless forced to do so. They may be overnight millionaires who just made it big in business or won a lottery, and who have been counselled to ‘talk to someone’ about how to deal with their changed circumstances.

Whatever the precipitating factor, such clients are often sent to you during times of tumult and change in their personal lives. Although this may not seem like an ideal situation, your help can result in remarkable peace of mind for the individual and his or her family or wider social network. It can take a little extra time and sensitivity from you to get past their initial resentment, embarrassment or discomfort over having been sent to you, but it is possible to form a vibrant working relationship with such folks.

Odds are high that they truly do need some help. It’s equally likely that the people who sent them to you need some help, too. Your task is to figure out whether it’s your help that is needed first and foremost (as opposed to the help of a therapist, attorney, or bond bailsman), and, if so, how to increase the likelihood that they will make use of it. We will be examining ways to do so in Chapters 6 and 7.

To increase confidence

Another common reason for consulting with experts is to increase confidence about an intended plan of action. Individuals want to make sure they have not overlooked any important considerations that could end up disadvantaging them. You bring extra value to the advising relationship when you employ different decision-making strategies or consult different sources of information than the clients would use on their own.

A study undertaken by the Financial Planning Standards Council of Canada has confirmed the value of the profession in this regard.⁷ The study followed Canadians whose net worth spanned the gamut from modest to wealthy.⁸ The results revealed significant increases in the financial and emotional well-being of clients who had consulted comprehensively with financial planners. Quite strikingly, there were marked increases in confidence apparent in every domain surveyed. Not only did expert financial advice increase people’s confidence that they were on track to meet important future goals, but it also increased their confidence they could deal with setbacks in life without having to forego some of the good things that money can buy in the here-and-now. Similar increases in confidence were highlighted by the Fidelity Retirement 20/20 survey report in 2017.⁹

Many financial advisors can cite examples of grievous over-confidence in people from their own client list.^* While such clients stick out in our memory, they are not typical. It is much more common for people to seek advice because they are unsure of something, and are concerned that what they don’t know could hurt them. They want to leave your office with the certainty they have considered all of the pertinent factors and have settled on a satisfactory plan of action. If you can provide them with that confidence, they are more likely to persist with what they need to do.

To help make better tradeoffs

Consider the following questions:

Is it best to choose the lower monthly pension amount and ensure a greater survivor benefit, or opt for higher monthly payments from the outset?

Am I better off by moving to a bigger, less expensive house in the suburbs where I’d have to commute longer distances, or by staying in my tiny city house where everything is close by?

Should I leave my fortune to my ingrate grandkids, or give it all to the Squirrel Rescue Sanctuary?

These are questions that can’t be answered with factual information alone. Crunching the numbers can give some guidance, but that’s only the beginning. What really improves the quality of decision-making is personalized attention from someone who knows your family history, your lifestyle preferences, and your values – or, at least, someone who is willing to take the time to have those kinds of conversations with you.

Dan Ariely is a psychology professor and the author of several bestselling books on behavioural economics. He has devoted his career to the study of how and why people make the decisions they do. One of his most robust core findings is that people often do not know how to choose rationally, let alone wisely. Fortunately, he assures us, people can be helped to make better tradeoffs just by being asked to consider some of the things they normally overlook or are prone to overvalue. In light of this need, he asserts that financial advisors should radically rethink what they have to offer their clients. Instead of spending an hour fine-tuning a client’s investment portfolio in advance of an annual meeting, argues Ariely, an advisor would offer greater benefit talking with the client about spending and savings patterns and the tradeoffs involved in day-to-day decisions.

Ariely has found that advisors presented with this proposal usually argue strenuously against it.¹⁰ ‘That’s not my job!’ they protest. ‘Why not?’ Ariely pushes back. Who else is equipped to help someone with decisions involving both actuarial and lifestyle considerations? Doing so blends both the technical and the personal sides of advising at the highest levels.

To receive encouragement

My congregation was recently asked to fill out a survey regarding why people attend weekly church services. One of the main questions was, ‘What do you most want to experience as a result of coming to church?’

Top answer: Encouragement.

Heck, yeah!

I see the same yearning in my financial therapy practice on a daily basis. People who come to see me usually have some kind of painful money history or current dilemma. They may have made bad investment decisions or overspent. They may have been exploited or experienced a huge hit to their lifestyle due to a major personal setback such as job loss or divorce. Because of the secrecy and shame that attend financial matters for many people, they may find themselves to be short on support and encouragement when they need those things the most.

Warmth and good cheer are rarely misplaced, but they are especially vital to clients who are trying to change longstanding habits. When the behaviour change is daunting, long-lasting, preventative, or unusual for their social circle, your encouragement can go a long way to helping people persist. Too often, however, financial change agents cut clients loose once they’ve demonstrated just two or three months of positive behaviour change. That is just around the time that clients’ enthusiasm starts to flag, or they get hit with an unexpected life event, or their deadbeat cousin shows up and starts pressuring them to do something contrary to the plan you’ve co-created.

To have someone to blame

One of the blessings of disposable income in my life is that it allows me to hire a housecleaner. Having such a person come into our home offers some of the benefits cited in the previous pages – ‘time savings’ and ‘offloading of unpleasant tasks’ chief among them. But one unexpected benefit of a housecleaner has been that there’s always someone for me to blame when something goes missing! (Just to be clear: I blame her only in my head, not out loud. Because it never actually is her fault. It’s really the kids’. Or the dog’s.)

Evidently, I’m not alone in finding it comforting to have someone to blame. I have had many couples report to me that they hired a financial expert because they did not want to deal with the other’s wrath if something went wrong in their family business or retirement planning. There is some research support for this notion. In a 2016 study, researchers confirmed that some people ‘delegate primarily to cede responsibility and blame’ rather than for the more logical reason of benefitting from wise counsel.¹¹ Just imagine the marketing fun you could have with that one!

To feel safer

Seen from a different perspective, having someone else to blame if things go wrong could be construed as a darkly funny variant of trusting in someone’s expertise to keep you safe. Of course, feeling safer goes way beyond the blame phenomenon. People consult with experts because they want to experience that calm, settled state that I highlighted at the beginning of this chapter.

In his book Pre-Suasion: A Revolutionary Way to Influence and Persuade, social psychologist Robert Cialdini discusses the influential effects of experts on decision-making. When people are unsure of what to do or how to think, the existence of someone with presumed legitimacy or expertise seems to invite people to behave like cyclists on the Tour de France: They tuck in and draft behind someone they trust.

Functional neuroimaging studies allow scientists to see what happens to brain activity as people are put through a variety of cognitive tasks. Evidence shows that the presence of an expert can change the very way our brains process information – or, indeed, cease to process information. In one study¹² that journalist Jason Zweig has dubbed ‘Your Brain on Investment Advice’, participants were tasked with making difficult financial decisions either on their own or with some input from an identified expert. When left unassisted to decide on the relative merits of a given option, subjects showed increased activity in the areas of the brain involved in weighing options and opinions. That was an entirely unremarkable finding. That’s what was expected of brains working hard to reach a decision. But that all changed when subjects were offered access to the advice of someone identified as an expert economist. Under that condition, structures involved in active decision-making seemed to go into hibernation. The brains of people under conditions of expert economic advice looked a lot like the brains of people at prayer: trusting; non-critical; safe.

These findings should make you blanch, at least a little. Clients put a lot of faith in your presumed expertise. While that is generally a good thing, it can be a dangerous thing, too. This goes well beyond the obvious Don’t be a Bernie Madoff injunction. The ‘tuck and draft’ model can offer a convenient excuse for continued ignorance among financially avoidant clients who want to remain that way. It has fiduciary implications for you, the advisor: How do you get truly informed consent from clients who trust you implicitly and who would happily sign any piece of paper you give to them, regardless of whether they understand its contents? Advice-giving under such circumstances requires advisors to be extra-scrupulous about understanding their client’s hopes and concerns, surpassing the rather perfunctory and unhelpful ‘Know Your Client’ protocols required by many companies. Doing your due diligence in this regard serves to enhance safety at all levels, for both you and the client.

What gets in the way of these aims?

The preceding pages summarize the chief aims behind asking for advice and the most powerful advantages of receiving it. Sometimes, of course, people may not know what their true motivation is for reaching out. They may say that they want expert input when what they really want is external confirmation. They may say that they’re looking for more information when what they really crave is more discernment. There can be a further disconnect between what the client is asking for and what the advisor is attempting to address. Such discrepancies or mismatches can contribute to good advice being ignored.

A further problem with respect to advice-seeking involves the advice-giver moving too quickly into offering solutions. A justifiable confidence in their capability can lead seasoned and rookie professionals alike to launch prematurely into offering solutions, before they’ve fully ascertained the client’s reasons for reaching out. This is a major turn-off, and a chief contributor to non-adherence.

A related problem is the tendency of some professionals to dominate the discussion, especially during that all-important first meeting. Out of a desire to impress or instill confidence or seal the deal, financial professionals talk about their ‘process’, their superiority over their competitors, their array of offerings … you get the picture. But clients rarely give a rat’s patootie about our process. They just want to know they’re in good hands with us. And the best way for that to happen is for us to spend time finding out why they’ve come to see us.

If you want to create engaged, satisfied clients, it is crucial that you signal your willingness to meet their needs right from the outset of your involvement. You do this by determining what the client (or potential client) wants to experience or achieve as a result of meeting with you. It is vital that you ask what that desired experience or goal is, every time you meet, even if you’re pretty certain you already know the answer. Here’s why asking is important:

It’s courteous.

It encourages efficient use of meeting time. (Remember that these questions were initially developed for health care practitioners. If neurosurgeons are convinced of the ultimate time savings these kinds of questions confer, you, too, can trust that they will offer efficiencies for you.)

It zeroes in on the issues of primary concern to the client, thus signalling your commitment to being a Thinking Partner.

It facilitates the emergence of concerns that clients might otherwise be reluctant to bring forward.

When working with couples, it helps ensure you meet the needs of both parties.

Summary

The fundamental reason that people seek advice in any domain of life is because they want help in solving a problem. They are experiencing some level of uncertainty or reluctance at the prospect of dealing with the problem on their own. Even when a given problem seems entirely cerebral or purely factual in terms of its content and/or its solution, there is always an emotional aspect to advice-seeking. That’s because uncertainty causes a certain degree of discomfort or suffering, ranging from the miniscule to the alarming. When that cognitive uncertainty is resolved, that internal tension is eased and emotional settling occurs.

People seek advice to solve a problem, so that they can feel more settled as a result. The more you can contribute to this settling, the more trusted and valuable an advisor you will be to them.

Adherence Boosters

1. Make a point of establishing a clear agenda at the outset of every meeting. Ask:

What would make our time together today the best use of your time, energy and money?

What are you hoping will happen as a result of our meeting?

2. Sometimes the answers will seem self-evident by virtue of the service you provide. A tax preparer, for example, can be reasonably sure that most clients would just like their taxes done. If this is the case for you, then modify the questions as you see fit, but do make a point both of determining the objectives and of ensuring you have met them. For example:

Aside from the obvious, is there anything else that brings you here today?