This is the fifth of eight new articles by Olivia Mellan and Sherry Christie that continue the discussion on Your Client’s Brain that began with Investment Advisor’s February 2013 cover story—Double Think: Getting Past the Conflict in Your Clients’ Two Brains—and a feature article—Second Thoughts: Making Better Decisions—in the March 2013 issue of IA.
When a client is torn between the pros and cons of a decision, how does an advisor help that client make the best decision, or even any decision at all? Psychotherapist and consultant Linda Graham has a simple solution: flip a coin. “It’s not that the coin toss makes the decision,” she explains, “but there is a split-second recognition when they see the result: ‘Whew! That's what I wanted’ or ‘Oh no! That's not what I wanted.’ This intuitive hit can help inform the decision.”
Duke University Professor of Psychology and Behavioral Economics Dan Ariely, who has also recommended this trick, suggested in his January 5-6 Wall Street Journal column that if one option is more emotionally tempting (e.g., snacking on chocolate cake vs. an apple), you imagine that the decision you make will take effect a week from now.
“When the choice is framed this way,” he wrote, “you might be more able to override the influence of your current emotional state and pick the option with long-term benefits.”
(See my article “The Upside of Irrationality” for more about Ariely, author of “Predictably Irrational” and other books about behavioral economics.)
We invite you to visit the Your Client’s Brain landing page on AdvisorOne for additional archived and ongoing coverage of this important topic.