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By David RichmanManaging Director, Advisor Institute

What drives prospective clients' inertia? For years, I have been suggesting the answer is status quo bias or complacency—the classic "all set" objection. Let's step back and "think again" as there may be other biases at play.

Professor Adam Grant's most recent book, "Think Again," left me wondering, "What if a prospective client's inertia is driven by other biases such as overconfidence or binary bias?"

Overconfidence bias is the tendency for a person to overestimate their abilities and opinions. Overconfidence bias in a prospecting call may sound like this:

"Now, more than ever, I am certain we are headed for a recession with the recent banking challenges and am going to keep my powder dry until the dust settles."

Binary bias is the tendency to seek clarity through oversimplification by narrowing down all the possible scenarios on an issue to two, often opposing, views (good or bad, true or false). Binary bias may sound like this:

"This is no time to invest given what the Fed has been doing."

Professor Grant suggests there may be an antidote for both: "complexification." It means what it sounds like—the act of adding degrees of complexity rather than keeping it simple. According to Grant:

"A dose of complexity can disrupt overconfidence cycles and spur rethinking cycles. It gives us more humility about our knowledge and more doubts about our opinions, and makes us curious enough to discover information we were lacking."

After acknowledging a prospective client's view, consider adding a bit of complexification with an ism (timeless) or thesis (timely)—pithy sound bites that connect the dots to the work you do with your clients. Here's what that might sound like:

  • Ism sample response to overconfidence bias (in bold): "Agreed, recession is a reasonable possibility from here. Then again, as I always remind my clients: Noise is often confused with signals."
  • Thesis sample response to binary bias (in bold): "Yes, the Fed certainly has been aggressive. Especially given recent banking challenges, we believe the Fed's aggressive moves may be the signal of the past."

Bottom line: Instead of debating a prospective client's overconfidence or binary bias, try adding a bit of complexity to the conversation using your isms or theses.