REGRET aversion
‘Investors reluctant to acknowledge mistakes to avoid feeling bad ’
It’s obvious, but avoid criticising previous mistakes or highlighting errors of judgement – it will make people feel bad about themselves. And while it may seem obvious, how many of us have had this type of experience? It’s more common than you might imagine.
action
If you’re reviewing a client’s past financial history, be wary of being critical – people don’t want to be reminded of past mistakes or errors of judgement.
Of course, the opposite is also true: Find something positive to say or pay someone a compliment and it goes a long way, but make sure it’s sincere or people will suspect your motives.