There are financial advisers, insurance advisers, career advisers, and academic advisers; there are relationship, nutrition, and spiritual advisers; there are advisers for fashion, for feng shui, and for leadership. Nearly every decision in our modern world can be put under advisement if we would like it to be.
This has advantages: second opinions can be useful and reassuring; two minds are often better than one.
But it also has disadvantages: advisers, despite their best intentions, may not give the best advice; they might even offer counsel that they, personally, would not follow. Female obstetrician-gynecologists, for example, advise patients to undergo mammography screenings earlier and more often than they themselves get screened. And financial advisers tend to be more cautious with clients’ investments than with their own.
In general, “decision-makers are significantly more risk averse when choosing for others than when choosing for themselves,” write Jason Dana and Daylian Cain of the Yale School of Management in a review article for Current Opinion in Psychology. Dana and Cain go on to explore why people with seemingly good intentions—not having typical conflicts of interest, which is an area the researchers have also studied—suggest that others make different choices than they would make themselves. “Our focus,” the authors write, “is on nonpecuniary, psychological factors that lead advice to diverge from choice.”
They find a number of factors that account for this divergence. First, people appear to have a limited capacity for symhedonia—positive feelings about others’ good fortune. People are instead more sympathetic to others’ losses. Advisers may thus be prone to weighing losses more heavily than gains when making choices for or offering advice to others. Advisers also expect to be held accountable for the advice they give. While this accountability has self-evident benefits, people tend to be blamed for failure more than they are credited for success. Fully aware of this imbalance, advisers will likely give more weight to a decision’s potential negative fallout than to its potential benefits.
Dana and Cain indicate how these underlying psychological factors contribute to a larger problem: many policies aimed at improving the quality of advice can, unintentionally, end up making it worse. For instance, making advisers more accountable for outcomes could simply make them more risk-averse, inducing them to shy away from offering better but riskier advice. Similarly, encouraging the development of close personal relationships between advisers and advisees can make advisers overly cautious and advisees overly compliant, with both parties making efforts to avoid straining the social bond. For example, studies have shown that the longer patients have seen the same medical provider, the less likely they are to seek second opinions and the more costly their care ends up being.
In some ways, the final prognosis is bleak: “We are skeptical that advisers can rid themselves of the cognitive and motivational biases that skew advice,” conclude Dana and Cain. But they offer “a potential curative”: advisers should project their own tastes when giving advice and advise others to act as they themselves would act. To nudge advisers in this direction, the authors suggest that advisees frame consultations with the question “What would you do?” rather than “What should I do?”
In short, the findings indicate a need for advisers not simply to avoid financial conflicts of interest, but also to limit the influence of less measurable psychological factors that contribute to conflicted advice. “By definition, a majority of us are in the majority a majority of the time,” write Dana and Cain. “Absent strong evidence that one is in the minority, it is probably an improvement to assume others want what we do when giving advice.”