We can't really help ourselves. And increasingly, when it comes to investing and retirement planning and simply making personal finance decisions, there is an incredibly large chance we will do so with our emotions. We know this. Our financial advisers - if we have one that is - knows this as well. And those that sell us what we want to buy - in this instance, stocks, bonds, or mutual funds, also know this. In fact, these last two groups depend on that human foible to make money.
The question is: can we do anything about this? Not without our emotions it seems! In fact, the very things that drive us to do the wrong thing actually is what we will rely on to help us do the right thing: get help.
But we put obstacles in front of that pursuit that may very difficult for some to overcome. No one doubts the significance of expert knowledge. Those obstacles, considered biases by those in the behavioral academic field suggest that the more difficult an activity is perceived, the increase in anxiety and fear jump to match.
Can we get past this with any success? First off, we need to consider whom we are seeking out for help. Mentors and/or close family members can be of some assistance, not so much in the actual dispensing of advice - although some will and in doing so, are chancing the health of that relationship in the process, but in the referencing of people they have worked with in the past.
Yet, confusing the situation even more is that very experience. You are not the person who might recommend their adviser. You are unique in your handling of your own biases. Those biased are ours to keep and order in such a way as to become uniquely our own, even if they are essentially the same in all of us.
Worse yet, the group think that is the marketplace doesn't do a very good job of assessing the markets. And those advisers are part of that group.
When it comes down to it, our emotions determine our risk and that can be problematic. Admittedly, it was only recently that these emotional and motivational factors have been recognized for what they are: a slurry of cognitive missteps that include worry, second-guessing and wholly irrational behavior.
That doesn't mean it can't be done. It simply means that it won't be as easy at they say it could be. In fact, walking into an adviser's office is the only easy part.
Basically, you're smart. You know quite a lot about yourself and probably have ignored the things you don't like. Most folks stare into a mirror to identify shortcomings and fix them, giving the outside world the perception of how you look without them. Tuck a curl there, straighten an eyebrow, pick at your teeth - all efforts to fix the things the mirror tells us is wrong.
Finding a financial adviser is like looking in the mirror. Only a stranger often looks back, someone with histories we'd just as soon forget, investments gone sour, debt incurred and opportunities wasted.
The reflection of you as an investor, just like the grooming tips you adjust in the mirror, are something you can fix with help. You won't achieve perfection. So don't try. But try you must. You need to find what is risky and how you feel about it. From there, you will find something you haven't quite known about yourself.
Remember two things: Your adviser might not want you and you might not want them. And secondly, the act of looking for one, even if it comes free with your employer's 401(k) plan, is you getting closer. And closer is a very good thing!
"As a general rule, people ask for advice only in order not to follow it; or if they do follow it, in order to have someone to blame for giving it." Alexandre Dumas
