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January 21, 2013 at 07:00 PM
Here’s a recent piece of research that has direct application to how you work with clients. Harvard psychology professor Daniel Gilbert and two colleagues conducted a study of 19,000 people ranging in age from 18 to 68 and discovered this: People of every age seriously underestimate how much they will change over the next 10 years. Put another way, people of all ages suffer from what Gilbert et al., call the “end of history illusion.” That is, we all think we won’t change much in our 10-year future, even though we also report we’ve changed significantly in our 10-year past.
The obvious ramification for advisors is that people—their priorities, their worries, their hopes—change throughout life, so even if the markets and the economy were static for a long period of time, what your clients want in life will change significantly, at every age.
This research supports my belief that we stand at the threshold of a major change in what we know about the human brain, and our cover story in this issue by Olivia Mellan explores some of the latest findings in brain research. I’ll let the words of Mellan and her collaborator Sherry Christie speak for themselves in the article that begins on page 22.
I would also argue that a deep understanding of human behavior will differentiate you in a marketplace in which most advisory firms appear pretty similar to each other.
