The Guardian in April 2013, published an extract from an essay first published at dobelli.com an example of the work in The Art of Thinking Clearly: Better Thinking, Better Decisions by Rolf Dobelli is published by Sceptre.
In the Guardian extract, Dobelli posits that one of the biggest detractors to our cognitive processes ie: our thinking, is our consumption of "news".
He argues that daily we are fed "stories" in a manner which does not require us to critially analyse what it is we are reading and consequently we don't "think", when we think we are thinking!
What the media does is if we look purely from a financial planning / financial services point of view is publish stories that deal with the negatives of an issue. If we as consumers could recognise or be informed by the journalist what the relativities were, then we could assess the information and make a judgement on the entire situation. The current media reporting of FOFA as an example does not provide people with that opportunity. We are not rationale enough beings to rely on the press. For me the current reporting is a lot like what Dobelli says about the media reporting of a plane crash : "Watching an airplane crash on television is going to change your attitude toward that risk, regardless of its real probability"
The way our bodies react to "news" especially hyperbole, panicked, extreme news stories is powerful: "It constantly triggers the limbic system. Panicky stories spur the release of cascades of glucocorticoid (cortisol). This deregulates your immune system and inhibits the release of growth hormones. In other words, your body finds itself in a state of chronic stress. High glucocorticoid levels cause impaired digestion, lack of growth (cell, hair, bone), nervousness and susceptibility to infections. The other potential side-effects include fear, aggression, tunnel-vision and desensitisation." (Dobelli, 2013).
This all has a damaging impact on our decision making process and we find constantly that, people, make bad decisions. This has a lot to do with the way we think. It has a lot to do with the two systems we utilize in our thinking.
System 1 : is intuitive and automatic.
System 2 : is reflective and rational.
The automatic system is associated with one of the oldest parts of the brain, and unless we actively override our brain at times, we may lose perspective and make the wrong choices.
In the media reporting of FOFA, the bad decisions that "news" may lead to is the lessening of trust in the financial advice system and process. When balanced with facts : that decision is not rationale. Some of the basic facts around financial advice clearly spell this out and daily we see positive client experiences from the engagement with financial advisers:
•$5billion paid in claims to Australians in 2013
•If it wasn’t because of financial advisers: where else would these people get the money?
•NPS scores : a score in the 50’s for the average financial adviser (Health Insurers and Telco's score in the negatives) and this indicates that once Australians get advice from a trusted adviser they have positive experiences
So how can we engage clients and get them and their social and family circles to stop the ingestion of "news" and assist them to make better decisons?
This is where professional advisers, professional financial and insurance advisers can step in. We can organize the context in which people make decisions. We can influence peoples behavior in order to make their lives better.
Research on what makes up best practice financial advice has also uncovered detail on how clients feel before, during and after the advice process. What becomes apparent is that by tapping into the core motivators of clients, in regard to their values and their innate hardwired human needs, not only engenders the adviser to the client, demystifies the advice process and maximizes the possibility of the prospect becoming a client; but, that the well-being and sense of self of the person receiving the advice is markedly improved. Leading businesses have done this by truly engaging clients with:
•a concept of the types of clients they can specialize in and like working with
•capabilities to deliver needed specialized services and resources to their desired client set
•positioning of the typical outcomes these types of clients have in the messaging and value statements they make about the services they offer
•a process where client stories are illuminated so that the prospective client can associate and relate to the outcomes produced
•the resources for clients to participate and collaborate in the advice process
Increasingly then firms delivering best practice advice are utilizing techniques and tools such as mind maps, lifestyle questionnaires, wealth indices, personality profiles and wealth choices diagnostics, to engage clients, set benchmarks for communication, engagement and outcomes and in so doing are winning the hearts and minds of clients and delivering not only financial but psychological well being outcomes : they are helping their clients to "think".
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