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Q3 2021 hedge fund letters, conferences and more
I’m reminded of this famous quote, attributed to cartoonist Walt Kelly: “We have met the enemy and he is us.”
Our “enemy” is lack of self-awareness. While advisors don’t suffer more from this trait than others, it’s a huge problem for those who wish to convert more prospects into clients.
The “Above Average” Myth
I’ve never met an advisor who didn’t believe the services they provided were “above average.”
The “above average” assessment isn’t limited to advisors. As noted in this article:
[P]eople generally consider themselves smarter, luckier, better looking and more important than they really are. They regard themselves as exceptional and believe that they will avoid the divorces, premature deaths or weight gains that befall everyone else.
There’s evidence we believe we’re more intelligent than we are and we don’t recognize our shortcomings, so we make no effort to correct them.
Business leaders believe their firm is more likely to succeed than their competitors. College professors believe their work is better than their colleagues. Surgeons in training and clinical psychologists overestimate their ability to provide an accurate diagnosis.
The “No Bias” Myth
We’re all aware of confirmation bias and other biases that reduce investor returns. Yet few of us acknowledge our own biases.
Whatever opinion we hold, we believe it must be reasonable. If our views are really reasonable, those who hold contrary views must be unreasonable.
Think about that the next time you have the “active versus passive” discussion with a prospect. If you start with the premise that their view is irrational, and you must convince them otherwise, how productive is your session likely to be?
Inaccurate Perception
How we see ourselves may be quite different from reality.
A recent study determined whether there was a difference between our self-perception and an objective view of our faces and bodies.
It found that our view of how we look is impacted by the personality traits we attribute to ourselves. According to one of the co-authors, “…if a person believed that they were an extrovert, they pictured their own faces as looking more confident and sociable than they appeared to other people.”
Read the full article here by Dan Solin, Advisor Perspectives
