Each quarter, we conduct a survey among financial advisors to gauge their confidence and sentiment regarding the economy, retirement savings, investing and market performance. In our most recent Brinker Barometer, we asked respondents to reflect on key financial issues, including their clients’ retirement readiness, investing and the nation’s debt problems.
One of the dynamics advisors face with many clients in the retirement planning process is a loss of interest or focus. During initial meetings, clients seem gung-ho to organize their financial lives organized and plan for the future. They eagerly meet with their advisors and gather any documents or paperwork the advisor needs to initiate the process.
After about the second meeting, suddenly things slow down.
Sometimes they even grind to a halt.
The same phenomenon occurs with other tasks that people view as chores. After all, who hadn’t looked around a driveway littered with everything that formerly inhabited the garage and wondered why they got involved in the project in the first place?
A research team at Northwestern University’s Kellogg School recently proved that there is such a thing as a “stuck in the middle” phenomenon.
Study participants had to read and find the errors in nine essays. The first time they read essays, they found an average of .122 errors per second. The next time they only .092 spotted errors per second. Their accuracy was the best on the third and final try. They found .124 errors per second in the third set, which they knew would be their last.
What this study demonstrates is that people are motivated at the beginning of the chore, and at the end – because it is almost over. The middle is the attention vortex.
Keep this in mind when you structure your process. If possible, front and back-end load the tasks that you need the client to complete – like filling out fact finders and locating documents. Also, let your clients know when they are nearing the end of the planning process (and entering the active monitoring stage), so you both can benefit from extra burst of energy.
Saving for retirement can seem like a daunting task. When an advisor enters the picture the perceived difficulty of the task lessens. Before the advisor makes a single recommendation.
It’s all about perception.
A research team at Rutgers recently proved that a task looks lighter if help is promised. The team asked study participants to estimate how much a sack of potatoes weighed. If the participant thought he or she would have help lifting it, they guessed it weighed on the average of 9.4 pounds. If they thought they had to lift it alone, their estimate was 10.5 pounds.
The Rutgers team took a look at how competence shapes perceptions as well. They ran a study where the aid came in the form of a seemingly injured person, i.e., someone with an arm in a sling. In those instances, the task didn’t seem lighter at all.
While saving for retirement is intimidating, if clients know they have an expert at their side, the burden will seem lighter.