Planning with Candy

September 2003
Journal of Financial Planning;Sep2003, Vol. 16 Issue 9, p22
Academic Journal
This article presents an idea for financial planners in persuading clients to accept and act on financial planning recommendations, based on a behavioral research wherein one puts a candy jar on one's desk and invites the clients to smack first. Researchers at Carnegie Mellon University in Pittsburgh, Pennsylvania, gave a bag of candy to people in two groups and asked them whether they would rather receive $3,000 next week or wait two months and receive $3,800. In one group, the participants were allowed to eat the candy before answering, while the other group could not eat until after they answered the question. The group that had to wait tended to choose the immediate reward of $3,000. Those who ate the candy first were more willing to wait for the bigger payoff. The study is part of the growing research into the impact of emotions on financial decisions. Perhaps planners could contribute to the research by trying out various food groups on their clients to see what different reactions they get to planning recommendations. For example, clients who drag their feet on estate planning might respond better after a glass of chardonnay and a little Brie, or a dinner in a nice restaurant.


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