Short of neurostimulation, Berkman’s research suggests less extreme, and less invasive approaches to influencing behaviors that could apply to financial advisory work.

Berkman said, “When you think about utility, when you're processing whether to invest in option A versus option B or considering gains versus losses, you see activity in this region called the ventromedial prefrontal cortex. For a long time, people in our field have thought about this region as the value region. It turns out that this exact same region is also involved when you think about yourself.

“To us, that's kind of interesting because it's saying, maybe value is more related to this idea of subjective value. It's about self. It's value to me. When you're thinking about your own traits, you're evaluating yourself in the same way that you might evaluate purchasing options and biasing those options in a predictable, human way.”

Whoa, what did he just say?

This touches on what behavior science calls the “endowment effect.” It means that we tend to overvalue things we own, regardless of their objective value. Consider what we spend our money on. The ways we spend our money reflect our core values. These things we buy with our money become a part of us and trigger neurological—and emotional—reactions.

Here’s a practical takeaway for you—armed with this kind of knowledge, you wouldn’t need to prescribe futuristic pills to help your client set a budget or stick to retirement goals. Instead, you could use this connection between sense of self and sense of value to shape discovery questions, steer clients towards good financial decisions, and even reaffirm your own value to your client. 

In one of my earlier podcasts with Sean Young of the UCLA School of Medicine, he made a similar point. Namely, that to get your clients to change their behavior, one key is to help direct them toward behaviors that are important to them. If the desired behavior is important, and you can ask questions to help the client further understand its importance, then you’ll increase their likelihood of moving toward the new behavior.

Closing The Knowing-Doing Gap

Berkman also thinks that this new map of the human brain could also help us close the classic “knowing-doing gap.” It’s the gap between knowing what to do, but just not doing it. This is a key area of interest for the professor, and he believes that closing the gap starts with deemphasizing cognition (i.e., knowledge) and focusing on motivation.

More often than not, people understand what they want to do, and have the cognitive and physical ability to do it. For example, every smoker knows that smoking isn’t healthy and they have the ability to stop smoking. So why don’t they stop?