Why Don’t People Take or Act Upon Financial Advice?

By Marc Westlake

Published on: May 2, 2020

Financial Updates

Advice That Sticks

In her excellent book Advice That Sticks, Moira Somers takes aim at the problem of financial non-adherence aka people failing to follow sound advice.

A neuropsychologist and financial change expert, Moira examines the five main factors that determine whether a client will follow through with financial advice.

Failure to Act

Generally Financial Professionals will find that all parties recognise that the advice during a planning meeting is sound, and that the client seems eager. But often… nothing happens!

When good recommendations go unimplemented, clients’ well-being is compromised, opportunities are lost, and the professional relationship grows strained.


One aspect of the advice process, in any profession, is the requirement for the the client (or patient in a medical context) to have sufficient discomfort from their present position that requires a change in an established behaviour.

Day to day, for most of us, we don’t feel discomfort if we haven’t made a will, put income protection insurance in place to increased our pension contributions.

As we feel virtually no discomfort, we feel no compulsion to act.

Like many diseases of the body, the symptoms of poor financial preparation can take many years to manifest themselves.

Yet, the consequences of poor preparation can be literally catastrophic when disaster strikes. Think how many widows or widowers lives would be improved by the simple process of having affordable life assurance in place.

“If I had my way, I would write the word ‘insure’ over every door of every cottage and upon the blotting pad of every public man, because I am convinced that, for sacrifice that are conceivably small, families can be secured against catastrophes which otherwise would smash them forever.” – Winston Churchill.

Status Quo Bias

Making our finances more efficient requires a degree of time, effort, change, and expense.

Status quo bias is an emotional bias that gives preference to an individual’s current situation, even if it is not particularly desirable. This bias may be due to cognitive dissonance, sunk costs or loss aversion – the reasons are often irrational.

Admitting Mistakes

If we acknowledge that we need to make changes, it first requires us to admit to ourselves that we have made a ‘mistake’. In other words, we need to accept that we could have done better if we had done something different.

Naturally, this is difficult for many people to do. Most people find it hard to admit to themselves that they need assistance – often until it is too late. Think about the way some people view their health as a classic example – poor diet, lack of exercise, excessive drinking and smoking are common enough, yet all are clearly ‘bad’ for our general health.

Just because something is obvious doesn’t mean it is any easier to implement. As Warren Buffett says; “investing is like dieting, simple, but not easy.

What this tells us is that ‘good advice’ is hard to follow, and even harder to implement, since it requires making a change to an established behaviour. And we all know that habits are hard to break!

We understand that changing behaviours can be tough and work with our clients at a pace that is comfortable for them. You can read about Our Approach to Financial Planning here.

If you would prefer to have a chat, please schedule some time with one of our advisors.