- Tuesday 24 September 2019
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Imagine you have a medical condition that’s causing you discomfort or pain. You go to the doctor who diagnoses it as something relatively straightforward and easily cured. They write you a prescription and send you on your way. Seems simple, right?
It would be perfectly natural to assume that, in this example, there is a 99% likelihood that the individual will purchase the prescription and take as directed for the period of time instructed. I mean, why wouldn’t you?
It might therefore astonish you to know that the actual rate for prescription purchase and adherence, even in places where cost is no barrier, is bafflingly low. Research has shown that in cases like the one above, 20% of people don’t actually get the stuff they need and 40-50% don’t complete the prescription as instructed. Indeed, the rates for ‘life-improving’ prescriptions is even worse, where in some cases over 70% of people don’t follow guidelines intended to make a material difference to their quality of life!
Anyone who works in the area of personal development/improvement will likely nod their head bemusedly at these stats. In line with the proliferation of the wellness industry, whether it be fitness, diet, mental health or the multitude of other areas in this space, there is a growing body of work that seeks to understand why it is that we put up so many barriers to our own best interests.
In my last article I talked about how knowing your long term CashFlow position was the best way for learning what changes you needed to make now in order to protect your ‘Future Self’. By taking this approach there should be a clear roadmap to improving your situation and a set number of steps to doing so. These should be simplified into easy to understand recommendations and proposals by your advisor and most usually involve saving more or paying down debt, getting better returns from the money you have, ensuring your health is protected or any number of other sensible ideas.
Ideally, these proposals are prioritised according to factors such as risk and impact, with a clear rationale for implementing them and, in most cases, offers of assistance in this implementation.
Assuming that to be the case, again we would assume that these ‘actions’ are agreed to and implemented quickly, but once again the reality is far less simple!
In the almost 20 years that I’ve been working in this industry, the biggest frustration by far has been the gap between the advice process and the implementation of this advice. The term ‘gap’ can actually be applied to a number of barriers that arise in this stage of a relationship between you and your advisor. Time is the most common one, where, often to the frustration of all involved, it ends up taking much longer than intended or expected to get stuff done. There are many reasons for this and I’ll go through them in detail as they require real analysis. A more serious gap is Trust and in this instance it can be quite disorientating to find that a relationship (between advisor and client for example), which was presumed to be rock solid, is actually far less close than either party assumed.
Finally, one of the unintended byproducts of fee-based advice, which of course is the right way to work, is that far less demand is put on you to take out a financial product because the advisor is not reliant on commission from these products for their own income. As such, there can be much more hands off and ‘gentle’ approach when it comes to implementing the recommended actions from the advice. I call this a Pressure gap. Of course it doesn’t mean that we should revert to the days of ‘selling’ financial products under the guise of advice, but a little more urgency is never a bad thing.
To bring it back to the case of medical advice, one interesting piece of research showed that in cases where doctors were incentivized when clients took their prescriptions (by the pharma companies paying commission based on sales of their drugs, which seems so wrong!), the levels of engagement with the advice, both in terms of immediate take-up and long term adherence, went up significantly, which ultimately was to the benefit of the patients! Now of course this model naturally leads to cases of over prescribing, as the OxyContin epidemic in the U.S shows, and is clearly not the way advice should be given. But if not, then what can be done to make sure that you follow the advice you are given? To be honest there’s no clear answer to this. If I knew for a fact I’d be successful in a wholly different line of work!
What I hope to do in the next article is first identify the barriers that we put up and offer approaches that can be taken to break through them. Psychologists say that non-adherence to advice, especially advice that will improve some part of your life, is driven usually be fear. Most especially this is fear of failure, where the old adage ‘If I don’t try, I can’t fail’ is the one we fall back on. Breaking apart that belief system is what we’ll start on.