When to Stop Giving Advice
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I’ve always valued the wisdom of this quote attributed to Jack Bogle:
While the interests of the business are served by the aphorism, “Don’t just stand there. Do something!” the interests of investors are served by an approach that is its diametrical opposite: “Don’t do something. Just stand there!”
You probably convey this advice to your clients, especially during periods of extreme market volatility. You correctly believe you play an important role in keeping them from making emotional decisions that will likely impair their long-term returns.
Do you apply it to interactions with your clients?
Here’s what I mean.
Compelled to advise
We all suffer from compulsion to dispense advice.
A series of four studies found:
- People who give advice feel more powerful after dispensing it.
- Those who want to boost their feelings of power are more inclined to give advice. It has that effect.
- While giving advice increases your sense of power, if you’re told the other person didn’t take your advice, your sense of power diminishes.
- Giving advice can improve your confidence.
While these motivations for giving advice make sense, here’s what’s striking.
If giving advice makes you feel more powerful, the recipient of the advice feels less powerful, even subservient. Is that really the way you want your clients to feel?