Moira Somers — a clinical neuropsychologist and author of “Advice That Sticks: How to Give Financial Advice That People Will Follow” — wants the financial planning process to be pleasant, empowering, and rewarding.
She says financial advisors alienate clients by using fancy jargon and making the process arduous and overwhelming.
Somers also advocates for putting “helpful friction” in between your dollars and your decisions.
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Creating a viable financial plan that’s able to weather the twists and turns of one’s life is no small task — and sticking to it is even harder.
After all, as humans we’re hardwired to be susceptible to emotion and bias. What’s worse, failure to stick to a financial plan generally results in lost opportunities, avoidable mistakes, confusion, and overall poor results.
Dr. Moira Somers, clinical neuropsychologist and author of “Advice That Sticks: How to Give Financial Advice That People Will Follow,” doesn’t think it has to be that way.
“One of the things that drives people away from working with financial professionals is the fact that they often leave those meetings feeling stupid,” she said on “The Long View”, an investing podcast. “When you use things that are kind of in-language for the in-group, you end up leaving people on the outside wondering ‘What the heck did you just say?’ or ‘What did you mean by that?'”
Somers provides a simple example of the commonly used phrase “in the black or in the red.” While those familiar with the basics of financial jargon may be familiar with this analogy, Somers says evidence shows it’s not well understood.
“Often the information just comes at the person out of a firehose,” she said. “People get frustrated with themselves when they don’t act on their own best intentions and knowledge.”
But Somers thinks the financial advice and planning industry is taking the necessary steps to quell this notion — and their strategy is to make the process as fun as possible.
“When there’s a firm out there that can make it happen in a way that doesn’t feel nagging or paternalistic — but that actually managed to make it fun and create momentum that became its own motivation and reward — that is just really wonderful stuff to see,” she said. “In one case, I saw somebody use the gamification approach, which really is about just providing timely feedback and showing how much work they’ve done.”
What gamification can achieve
The goal of gamification, as it relates to financial planning, is simple: create an experience that is empowering and rewarding. It aims to provide people will rewards and feedback, rather than make it an arduous experience filled with dense information.
Somers says that, in doing so, an individual is much more likely to put a viable plan in place and stick with that plan moving forward.
“”In one case, 20 years worth of deferred decisions got wrapped up inside of two months,” Somers said. “I was just so heartened to see how it turned around.”
Further, Somers stresses the importance of putting “helpful …read more
Source:: Business Insider