A Major Source of Miscommunication

Dan SolinAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Do you struggle with getting clients to follow your advice, especially regarding long-term retirement planning?

Understanding how decisions are made helps.

If you believe decisions are rational, you will inundate your clients with facts and data supporting your views.

But decisions are made using a combination of emotions and data. The ratio of each depends on the person. You need to pay attention to the role of emotions to effectively communicate with your clients.

The neuroscience of decision making

Neuroscience has made significant strides in understanding how the brain makes decisions.

The brain’s prefrontal cortex is crucial in making decisions regarding future events like retirement. It plays a significant role in evaluating options, weighing the pros and cons, and ultimately making decisions that align with an individual’s goals and values.

While the prefrontal cortex plays a role in rational decision-making by considering logical reasoning and data, it also interacts with the amygdala, which processes emotions.