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There has
been much research on why people seem unable to make financial decisions in
their best interests with some of the acknowledged causes being; an inability
to cope with complexity, choice confusion, herd mentality, social proof, an
inability to look forward and to forward plan, a lack of understanding of basic
and fundamental concepts like compound interest and cash-flow management,
genetics (yes I’m serious), behavioural fundamentals and personality including
self-control, and sadly but unfortunately a reality, that some people through
socio-economic circumstances, background, upbringing and situation influences
are trapped in a “just getting by” whirlpool.
Is it any
wonder therefore, that despite your brilliant proposal, that a response of “I
need to think about it” is received?
That people do anything at all to move forward is somewhat of a miracle!
People are in fact disengaged with advice because of a complex interaction of: behaviour, socio-cultural influences, biology and cognitive skills. Therefore, as we have stated, it is the way you understand and manage your prospects and their emotional responses that will determine their willingness to engage with you, to make change. The disengagement, with ones’ financial affairs, that we have explored is not a deliberate choice. No-one wakes up in the morning or has as a daily mantra “I am deliberately avoiding dealing with my financial past, present and future”.
[i] Klement, J., & Miranda, R. E. (2012).
Kicking the habit: How experience determines financial risk preferences. The
Journal of Wealth Management, 15(2), 10-25,7. Retrieved from
https://search-proquest-com.ezproxy.lib.swin.edu.au/docview/1034599867?accountid=14205v
