Psychologists Reveal Your Mind To Financial Firms

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Body language experts are teaching financial advisers how to use applied psychology in marketing and sales.

Firms claim the behavioural science tips and tricks are to help advisers understand their customers so they can make better recommendations.

However, others fear unscrupulous sales people could use the methods to manipulate more vulnerable customers into making investments.

One of the largest firms admitting behavioural science is part of their marketing methods is Barclays Wealth.

Dubbing the term behavioural finance, Barclays explains psychology helps than understand relationships between emotions, personality, reasoning and market.

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Understanding consumers

Protection provider Aviva also confesses that behavioural science is called upon by their sales teams.

“We have researched ways to include behavioural science as tools for our advisers,” said a spokesman. “The methods help advisers understand customers better, especially their needs and decision making processes.”

However, the research is written from a corporate perspective rather than from the consumer’s.

Experts tell advisers not to offer too many choices to customers as this hinders decision making – which could risk the customer not being offered the product that’s right for them if the adviser is making the list of options.

The sales teams are also given tips on making customers more receptive – one suggestion is to give the customer a personally signed book as a way to build engagement.

The Financial Conduct Authority (FCA) has looked at different aspects of behavioural science for some time.

Manipulating decisions

A report was published in 2013 aimed at triggering debate about the methods within the financial industry.

The FCA stance is behavioural science could have many uses in helping consumers make the right financial decisions – but also has a darker side if advisers manipulate choices in their own favour.

For example, offering a more expensive option among a list of higher price products makes that product seem cheap and the one to buy, but the reality could be many cheaper products not on the list could be better choices for the customer.

“We see possibilities for behavioural science techniques helping consumers across a range of UK markets, such as savings, general insurance and pensions,” said a spokesman.

“But the thinking is behavioural economics could support more specific issues like simplifying products; consumer inertia; marketing and the impact of communications to consumers.”

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