The presence of financial advisors mutes our ability to reason and think

In a recent paper* published March 24, 2009, researches found that the presence of a financial advisor softened our sense of reason and decision making when faced with complex financial decisions: It's as if we know there is an expert in the room, so we don't need to think about it so thoughtfully (and thus strain our minds). Using fMRI scanners, the researchers found that when experts where not present and subject matters presented with a complex financial decision to solove, the problem solving neurotransmitters fired off in their brains. When they were in the room, they slowed down measurably.

If advisors knew that their mere presence caused their clients to think less clearly, they might stop to take the time to walk through the problem solving portion of their clients' complex issues, since their brains are not doing it themselves as well as they should be....


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*Expert Financial Advice Neurobiologically ‘‘Offloads’’Financial Decision-Making under Risk
Jan B. Engelmann, C. Monica Capra, Charles Noussair, Gregory S. Berns
Department of Psychiatry & Behavioral Sciences, Emory University School of Medicine,
Department of Economics, Emory University
Department of Economics, Tilburg University (Tilburg, The Netherlands)
Center for Neuropolicy, Emory University