Originally published on Advisor Perspectives, March 13, 2017

Prospects are searching for simple solutions.

Investing is complicated and multi-faceted. I’m impressed with advisors’ depth of knowledge gleaned from their own studies, experience, academic literature and attendance at numerous conferences.

When meeting with prospects, advisors want to demonstrate their expertise. You also may feel a need to justify your fee by showing the value you add by helping your clients reach their retirement goals.

Unfortunately, the way advisors convey information ignores basic principles of neuroscience. It is the equivalent of pouring water into a glass that is already full.

The brain has limited capacity

In his excellent book, The Science of Selling, David Hoffeld correctly noted, “Our minds can perform incredible feats, but they also have limited cognitive resources.” The brain can only process a modest amount of information at any one time.

In 1955, famed psychologist George A. Miller published The Magical Number Seven, Plus or Minus Two: Some Limits on Our Capacity for Processing Information. He concluded there are “severe limitations on the amount of information that we are able to receive, process, and remember.”

When the brain is confronted with too much information by being presented with numerous options, the ability to make a decision is seriously inhibited. One study found that people were more likely to purchase gourmet jams or chocolates or undertake optional class-essay assignments, when they were offered only six options rather than 24 to 30 choices.

Participants in these experiments who were given limited choices were also more satisfied with their selections.

Another study referenced by Hoffeld, examined how employees in 401(k) plans were affected by the number of investment options offered in the plans. The authors reviewed data from 800,000 employees. They found participation rates fell when more investment options were offered. Plans offering “a handful” of funds had higher participation rates than those with 10 or more options.

This study is consistent with other research finding that, when making complex and important decisions, too much choice (and being overwhelmed with information) often causes indecision and procrastination. One researcher stated, “When we make decisions, we compare bundles of information. So a decision is harder if the amount of information you have to juggle is greater.”

Applying the research

I have attended (and given) hundreds of presentations. All of them, including some of my own, suffer from the same infirmity: we provide too much information. Our effort to impress our audience with our expertise can backfire. When we make things complex and provide massive amounts of data, their brains shuts down.

Prospects are searching for simple solutions.

But we convey the impression that selecting the right advisor is intricate and complex.

What’s likely to happen? They will procrastinate or go with an advisor who made it easier for them to decide.

To maximize the likelihood of converting a prospect into a client, avoid the temptation to convey information and focus on eliciting it. Your goal is not to educate. It’s to find out what is on the mind of your prospect and address those concerns. When doing so, don’t lecture and pontificate. Make your answers brief and to the point.

If your prospects want more information, they will ask for it. Otherwise, focus on keeping it simple. Above all, remember, “less is more.”