A recent study seems to show that the brain switches off rationality when given 'expert advice.'
Financial advice can make us take leave of our senses, according to research that shows how the brain sets aside rationality when it gets the benefit of supposedly expert opinion.
When a bank manager or investment adviser recommends a financial decision, the brain tends to abdicate responsibility and defer to their authority with little independent thought, a study has suggested.
Such expert advice suppresses activity in a neural circuit that is critical to sound decision-making and value judgments, scientists in the US have found.
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“This study indicates that the brain relinquishes responsibility when a trusted authority provides expertise,” said Gregory Berns, Professor of Neuroeconomics and Psychiatry at Emory University in Atlanta, who led the research. “The problem is that it can work to a person’s detriment if the trusted source turns out to be incompetent or corrupt.”
The findings from Emory University hint at what personal finance journalists have known for years: that there are two automatic responses to anything money-related – boredom and fear.
Most people cannot wait to unburden themselves of their mind-numbing, terrifying money worries so that they can get on with more pleasant decisions, like what to have for dinner.
I understand this response completely which is why I urge people to find a financial advisor they trust, one who is regulated, qualified and experienced who will act as more as a decision partner with you. You can never turn over the final responsibility.