After the near-miss of a disaster we tell ourselves that we “knew what was going to happen all along.” The representative is forgotten and the consumer becomes the hero in his own mind. In hindsight, the consumer sees all the things that pointed to a stock market decline and justifies why the decision was made. And because the outcome of the decision was favorable, the consumer’s invulnerability is reinforced. The problem is it will be harder for the representative to convince the consumer the next time the market may head down because the consumer believes the last near-miss proved their predictive, “I-can-do-no-wrong” powers.
What can the representative do?
Remind the consumer that the representative played a major role in the consumer’s decision. Emphasize what a close call it was and ask if the consumer really wants to tempt fate again.
What if the consumer did not listen and was hit by the drop?
Hindsight bias also means if the consumer made a bad decision, he will find external justification to show why he was misled into a making a bad decision that obviously was not his fault. Naturally, the stock market loss was due to the last advisor, which is why the consumer needs a new representative.