Brain News for Financial Advisors

Brain News for Financial Advisors provides commentary on neuroscience research as it applies to finance, decision making, economics, and financial education.

This page is meant for financial advisors and the financially minded public.  Our goal here is to provide an educational resource for those who want to know what brain and behavioral research tells us about personal finance. Because that task is a very large moving target, this page will always be changing, starting with practical advice and top considerations.

Advisor One

If you are arriving here after reading Olivia Mellan’s Advisor One article and have additional questions, you are welcome to contact Dr. Greenberg directly.  This article focused on what financial advisors need to know about the brain, how to leverage that with clients, and which neuroscience ideas should be communicated to clients.

Catch up on what Advisor One has been saying about psychology and neuroscience as it relates to finance. This is provided as a service for those who are either new to the readings, or want a review.

Neurofinance:  – what do need to know in the beginning?

Neurofinance is the study of how brain research specifically applies to people’s financial behavior and financial thinking.  It is also a growing field that creates new neuroscience research based on financial questions.  Rather than study the  brain’s most basic mechanisms, the field of neurofinance uses financial questions to inspire and design the research itself.  This is relatively new within the field of neuroscience and as a caution to all readers, be sure to approach everything you read (including this site) with skepticism.  Until research is successfully repeated by different people, the results are speculative.  Science can take a long time to verify ideas, and while we want instant answers to our questions, it is best to take each study’s results as enlightened speculation rather than fact itself.

What should financial advisors know about the brain?

Stress.  The first thing to consider is that for quite a wide and depressing array of reasons, STRESS is primary “neuro-enemy” of your client’s health and decision making.  Not only does chronic stress damage the body and brain, it also impairs the brain’s ability to process information, learn, remember, and make decisions.  As a financial advisor, you would be doing your clients a service if you help reduce their stress every time they interact with you.  Clients should be informed of the importance to self-educate on stress reductions as well as general health improvements.  The body, brain, and mind all depend on overall health for optimal function.

Myth.  Because the brain is complex and people are impatient and don’t have a lifetime to learn all of the little details, there are many brain myths circulating in the popular press, and to a lesser extent within science itself.  For example, the most prominent brain myth is that “you only use 10% of your brain”.  The statement itself is meaningless because it does not define the brain (there are many parts, only some of which actually  process information), does not say “use for what?”, and has no basis in fact.  If anything, research shows that we use our whole brains every day for our entire life.  Each part of the brain supports specific functions, and even simple activities such as walking down a hallway while having a conversation depend on the massive networks supporting vision, hearing, speech, movement, balance, and more.

While there is no point in explaining each myth, the take home message for financial advisors is that by the time you hear information about the brain or behavior, you are hearing a highly simplified version of events.  What you hear on any given day is not necessarily true.  It may or may not stand the test of time, so just be careful in how you apply the ideas and be aware that science regularly revises its conclusions.  Common sense rules apply – if it sounds too good to be true it probably is not true.

Preconceptions – What do we believe?

Along the path of understanding ourselves, we encounter and are influenced by all of our previous beliefs and perceptions.  For example, many people hold the opinion that emotional decision making is bad.  However, a physiological truth is that we use our emotions and bodily sensations to choose our actions.  Our literal gut feelings are good cues in many situations.  The art of financial decision making will be to know how feelings impact short and long-term decisions, and then to plan accordingly.

Some very compelling work on emotions and decision making comes from Antonio and Hanna Damasio and many other neuroscience researchers have demonstrated the beneficial role emotions and sensations play in decision making.  The first take-home messages from research on emotion in decision making is that it is natural and to some degree predictable.  We do not need to minimize emotions but instead should identify them so that both advisors and clients operate while being aware of motivations for financial decision making.

Decision Making and Bias – Knowing Yourself and Your Client

Neuroscience research on financial decision making goes hand in hand with the field of behavioral economics.  Popular authors like Dan Ariele, and researchers like Daniel Kahneman explore what it is to be a human decision maker and how context affects perceptions, beliefs, and actions.  What happens when people do not make computationally rational decisions, avoid long-term planning, and fall victim to a variety of known cognitive biases?  A cognitive bias is a predictable way of thinking common among many people.  For example, the “sunken cost” bias (studied since 1985) appears when people’s investment loses value.  Should they hold on to the asset or not and how do financial advisors react to this situation?  This question should be answered by data and the person’s life situation, but we also need to account for the person’s perception of the value.  If you want to read an academic paper on this issue, open (

Along with cognitive biases, each of us has different emotional biases including different levels of risk tolerance, different preferences for which factors are important in a decision, and each of us is aware of only some of these.  Remember to combine the ideas of cognitive and emotional biases with #1…Stress.  Stress and any other strong emotional state (arousal) put the brain into a different mode of information processing when compared to the calm, relaxed, detached, and focused state.

The take home message for financial advisors is that the more we are aware of cognitive biases (yours and others), the greater our potential for control.  To see a note from Daniel Kahneman on the difficulty of translating this knowledge into action, see (  In this HBR article, Dr. Kahneman cites the McKinsey study (“The Case for Behavioral Strategy,” McKinsey Quarterly, March 2010) mentioning the financial impact of progressively reducing the impact of bias in decision making.


Learning Tools for All

In addition to posting additional commentary on the brain, behavior, and finance, Greenberg Educational Consulting Organization has been providing personal/professional development seminars on financial education since 2011.

Our “Mind Tools for Finance Seminars” employ brain-based learning techniques in conjunction with freely available visual information mapping software to simplify learning, memory, critical thinking, attention, and communication for both advisors and clients.

We want everybody to be able to use a common language of finance and visual thinking to help clarify issues across our lifespan, and especially during times of stress.  Computers provide a stress-resistant form of memory because they can’t get upset or distracted and forget critical issues.  The joke is that learning computers is itself a stress-producing process, so our trainings make this  far easier and faster so that you pass through any resistance and get into the benefits zone asap.

Because education can be difficult in the information overload age, Dr. Greenberg began conducting seminars (“Mind Tools for Finance”) on effective learning and financial awareness with Jerry Strayve Jr. (Stalwart Financial, CA), and Juan Ibarra (NY Life, AZ).  In these trainings, we presented a review of how our information overload society affects life, work, and the brain, provided training in visual information mapping software, and walked trainees through the applications of these techniques to the issues of financial planning and financial education.

The purpose of these seminars is to bring awareness to the range of topics each person will encounter when working with a financial planner, and to give each trainee software that helps them literally map out every relevant topic, their thoughts on those issues, and begin creating or expanding their

These seminars are always interesting because you can never predict exactly what people will say, do, or discover.  Not surprisingly, the breadth of topic coverage leads people to consider issues they either had been hiding from, or had never realized.  Our primary goals for these seminars are to 1) show people how to begin grasping the variety of issues by organizing them into a comprehensible visual information map, 2) use their growing maps as a forgetting-proof template for new financial awareness and planning, and 3) to provide a common language & format of explanation and critical thinking for both clients and advisors.

Online seminars will be offered in 2013, and if you want to be invited to our beta testing, click here and say “please invite me to your beta test of the online Mind Tools for Finance seminar”.


To see what else is being done at GECO Inc, please visit our other pages.