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Advice Overload

If there is one overriding lesson I learned from the research for my new book Ask, it’s this:  Avoid giving advice.

Of course, there are times when it’s appropriate to give advice.  If a client panics and asks your advice about “fleeing to safety,” you have an obligation to explain why that might not be a good idea.

That’s not the situation that typically confronts us.  We’re often asked for advice well outside our area of expertise.  That’s where the trouble begins.

Recognize your limitations

I was recently asked what advisors should tell their clients if the pandemic lasts for one or even two more years.  I started to answer, and then abruptly stopped.

This is the first pandemic of my lifetime.  I’ve never researched this subject.  I have no idea what’s likely to unfold. 

I’ve done some research that helps me understand how we should relate to each other in all circumstances.  That research has some relevance to this question. I limited my advice accordingly.

When you are asked for advice, consider reflecting on your limitations.  Is this something where you have specialized expertise?  If not, a better response might be to ask questions, contextualize the issue and focus on listening intently.

The halo effect

It’s important to be aware of the halo effect. It’s a cognitive bias that causes us to project traits onto people based on our overall impression of them.  The most common example is our tendency to believe attractive people have other positive traits.

Don’t underestimate the power of the halo effect.  One study found jurors were less likely to believe attractive defendants were guilty of criminal behavior.

In your position as a trusted advisor, the halo effect can be especially pernicious.  Because your clients trust you and rely on your investment expertise, they’re likely to seek your advice in areas unrelated to investments (like relationships, generalized anxiety and job issues). 

Your self-perception can exacerbate the problem. You justifiably consider yourself intelligent and may be tempted to provide advice when asked, even when the subject matter is well outside your expertise.  In this instance, you are giving yourself the “halo.”

Here’s a habit I’ve developed when asked for advice.  I try to substitute my natural inclination to dispense it with questions that probe more deeply into what’s being asked.

Most of the time, I’ve found the person asking for advice really just wants to heard and validated.

Resource of the week

This article discusses how the halo effect impacts our perception of others.

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