Dan Ariely on Post-pandemic Financial Planning
Post-pandemic financial planning will reward advisors who illustrate the relationship between money and happiness to their clients.
I thank Duke behavioral economist Dan Ariely for this insight. Ariely is renowned for his research in behavioral economics and is adept at describing the subject plainly as well as how to use this knowledge to improve our daily lives. I recently hosted him on a video where he discussed our complex relationship with money. Ariely has also helped in launching AdvisorsGiveBack.org, a platform for pro-bono financial planning.
Here are his thoughts on money, financial planning, and the post-COVID world.
Nature of money
Before getting into detail, he talked about the nature of money. “Money is an amazing invention,” says Ariely, “it’s as important as the wheel.” Before money, one person might grow broccoli while another raised chickens and they would barter an exchange rate. With money, we can store value and value is divisible. Money allows us to exchange, save, and invest for the future.
Ariely says financial planners are in the “money and happiness” business. Our goal is to maximize client happiness through the proper use of money. This means we must have more touchpoints with our clients.