All advisors and professionals working in wealth management and retirement need to be careful of this effect since they may be culpable when their clients executes harmful decisions.
from the Neuronarrative blog 26, 2009…5:01 PM
“What Does Expert Advice Really Do to Our Brains?
.…expert advice causes the brain to “offload” calculations of expected utility (loss or gain) when making a financial decision under risk.
- The brain defers to the expert when first given expert advice
- If then immediately challenged to make a decision, we’d also expect someone to go ahead with the expert’s advice
- The expert’s advice gets folded into a more lengthy process of figuring out the right way to go
- That process will probably include information from other sources, perhaps other experts, family members impacted by the decision, associates who have faced similar decisions, etc.
To sum up – immediately upon receiving expert advice, the brain appears to offload value calculations and the words of the expert carry the day.