The Neuroscience of Advice

Hey welcome to the neuroscience of advice. This is a super exciting segment talking about what your brain goes through. What your emotions go through, your psyche as you go through and get advice. And this could be in any area of your life. Obviously, it’s easy for us to talk about when people come in and meet and we talk about financial advice. So that’s what this is going to be. But I think it will apply to other areas where you might seek advice. So when we think of financial terms in the neuroscience of financial advice, what you’ll see across the board is that there’s different approaches to that. And so I know you might have been in a situation where you met with a Financial Advisor and their approach was just selling. All they wanted to do was sell you. They didn’t want to really hear or talk or listen. They just wanted to sell you a product. Okay, so that’s one approach. The next one would be maybe you get a little bit better advice and you start getting into those Financial Advisors that want to plan with you. And so here we’re going to have to get some more data. We’re going to have to get more information about you in order to help you make better decisions. And then the third approach is coaching. When you move all the way to the coaching experience of financial advice, I think you’ve hit the goal. This requires you know a good coach requires a lot of information, a deep understanding of the abilities, the strengths, the weaknesses of their player. And a Financial Advisor, if they’re coaching, they’re not going to just stop and coach with the financial piece. Because that’s important, but there’s a bigger human experience that we all get to go through life with. And so if we don’t focus on that holistic experience, then you miss the ability to get really good advice. Maybe you could take a second and just be like hey, I’ve been working with a Financial Advisor. I’m going to grade them. Are they just selling me something or are they being my coach, okay? So there’s a scale of one to ten. Maybe take a moment and grade. The next thing is when it comes to advice, what are you hearing from your Advisor? Are you hearing nothing but the mechanic? That’s very technical, that are using words that you have no idea what they’re saying. Or do you have the guy that’s going to be empathetic and listen and hear and say okay, here’s what that means and use different words. You know I think a good Financial Advisor will move the needle between both. When I’m meeting with an Engineer, I’m going to put my mechanic hat on. Okay, they need to see the details. They need to see the understanding of what the plan is going to be. But when you meet with that maybe potential widow that never dealt with any of the finances or you know that situation where they just didn’t have any experience. And anything financial makes them uncomfortable because they don’t know about it. Then maybe we want to be more of a guide. But when you’re in getting advice, when a Financial Advisor can recognize when to be the mechanic and when to be the guide, I think you’re going to be most at ease and get the best kind of advice. You know they say soft skills help on this. And I think soft skills are the hard skills. It’s really hard to have good soft skills. What soft skills am I talking about? Empathy, okay? Storytelling, communication, listening, curiosity, creativity, you know if a Financial Advisor has all those things, they’re really curious about you. They’re concerned about what you’re trying to do. They feel with you, not for you. And they really try to accomplish what you’re trying to get to, the place that you’re trying to get to. Now those soft skills have actually helped you in the process because now you can make better decisions because you’re at a different level of comfort. You know what sets us apart? Well the words we use set us apart. We’re unlike any other creature on this earth. We have the ability to think and then to verbalize and to use not only verbal, but also non-verbal communication. And when you’re in a situation where you’re trying to learn and you’re trying to figure stuff out, if you’re getting lambasted with these huge words that are unfamiliar to you that you don’t understand. Then that’s going to be hard for your brain to understand the decisions that you might want to make for your financial future. so being able to use words that will impact you and your understanding and find you at that point, the right point is really important when it comes to giving advice. Now, why is that? Because chemicals are going to be released. Cortisol, that’s the emotion, the neuro-chemical of pretty much everything negative. Negative emotions: stress, threat, anger. Okay where is that Cortisol floods your brain. And the problem with Cortisol when it floods your brain is it inhibits your ability to make good decisions. Then we go to the next neuro-chemical that gets flooded in your brain and that’s Dopamine. That’s pretty much the chemical behind every possible addiction. Okay, it’s the makes you feel good one, okay? The next one would be Oxytocin. Why is Oxytocin important? Because that actually fights against the Cortisol. That actually calms you down. That’s the one that builds empathy and trust. And so if that’s being released, now you have the ability to make better decisions. And then finally Endorphins. Endorphins you know is that feel good, similar to Dopamine, but also just gives you that ability to connect deeply and build those relationships. So what’s the proof in all of this? Well look at this brain scan. The picture on the left is somebody that is making a financial decision unassisted. They didn’t have any help. And then the brain on the right, they are being assisted. Okay, their brain, this is after 15 minutes. And the only part of that brain on the right that you see that’s red, that’s the auditory part. They can’t hear you well enough because they’re listening so carefully. So you know you’ve gotten the right kind of advice if you’re trying to listen so carefully and hanging on every single word of a person giving you that advice. So I hope this is helpful as you go through your pursuit of getting advice. Have a great day.