The Reason Behind Uncomfortable

The familiar saying 'get comfortable being uncomfortable' might be more of an insightful observation about human nature than we realize. Rarely do we encounter anyone who embodies this paradox fully, and yet the maxim resonates for a reason.

Why is discomfort so ingrained in us? What does this mean for our clients, especially as they approach the monumental life change of retirement?

Our exploration begins with behavioral finance and our cognitive biases. As our industry sharpens its understanding of human psychology, we aim to counter these biases:

• Confirmation bias, where we seek out information that reaffirms our beliefs, closing our minds to alternative perspectives.
• Selection exposure, aligning ourselves with those of similar beliefs, inhibiting exposure to differing viewpoints.
• Rationalization, where we concoct reasons to support our existing beliefs, safeguarding our self-esteem and belief systems.

These biases represent a struggle to find comfort within our inherent discomfort, a quest for a tribe that echoes our own ideas and shuns challenges to our worldview.

Diving into the realm of behavioral finance offers a glimpse into our cognitive biases, but there's a more profound story unfolding within the complex circuitry of our brains. It’s the story of cognitive dissonance, where the brain rebels against information that challenges our ingrained beliefs. 

Here, the neurological twins of conflict, the Anterior Cingulate Cortex (ACC) and the Insula, come into play. The ACC, associated with the sting of chronic pain, lights up not just in physical distress but also in states of depression, anxiety, and obsessive-compulsive disorders. The Insula, intertwined with complex emotions and cravings, echoes the patterns seen in addiction when faced with incongruent information.

This link to addiction is intriguing, as these brain regions also activate when we're 'hooked' on seeking information that aligns with our beliefs, fueling polarization. Just as an addict craves their substance of choice, we yearn for affirming data, creating echo chambers of comfort within the uncomfortable realm of challenged beliefs.

Yet, there's an even deeper layer rooted in our evolutionary past that highlights three key aspects:

• Hyper vigilance to threats was crucial for our ancestors' survival, allowing them to swiftly detect and react to danger.
• Anxiety over resource scarcity was ever-present, with unpredictable elements affecting daily sustenance.
• Social exclusion was a critical fear; belonging to a group meant protection and resource acquisition.

These evolutionary traits contribute to our default state of discomfort and explain the neurological pain we experience when our beliefs or status quo are challenged.

Now, picture our clients on the cusp of retirement. For over half a century, they've built their identity around accumulation and growth. The sudden shift to spending their hard-earned savings triggers a profound neurological and psychological response. It's not merely an economic adjustment; it's a fundamental identity shift, sparking the very same regions of the brain that react to physical pain and addiction.

The ACC and the Insula, in their discomfort, send our clients scrambling for the familiar, the comfortable. Yet, what once was a source of security—earnings, work, societal roles—transforms into a terrain of uncertainty. Resource scarcity, once an ancestral threat, becomes palpable as a fixed income looms. The primal alarm for hyper vigilance to threats intensifies, not against predators but against a future of unknowns. Social inclusion, previously anchored in the workplace, is now a question mark casting shadows on their sense of belonging.

In addressing these seismic shifts, the solutions we offer as advisors must resonate with depth and empathy. Here's how we can build on our understanding from our evolutionary past:

Deepen Client Alliances: Foster community among clients, going beyond mere investment discussions. Facilitate groups where clients can share experiences, fears, and triumphs related to retirement, creating a network of support that mirrors the tribal connections of our ancestors.

Amplify Clear Communication: A key for our ancestors was developing a common language to be able to coordinate & share knowledge about food and potential dangers. Craft narratives that not only inform but also inspire, ensuring clients feel understood and prepared for the changes ahead. And consistently communicate these to ensure you build on one of the core foundations of trust. 

Technological Innovation: Development of tools helped our ancestors to stave off threats and exploit resources. Invest in technology to help clients understand and overcome cognitive biases, to help fulfill desires for connection and create greater transparency. 

Sharing & Reciprocity: Sharing of resources and labor was key for our ancestors to create a buffer against scarcity. Create an engrained network of peers to help clients across all their needs from financial planning to life planning. And make it seamless. 

Foster Rituals and Traditions: Cultural practices helped our ancestors to reinforce group identity and cohesion. Find opportunities to create your own traditions as a firm and celebrate them with clients. Create inclusion that is unique and specific for your tribe. 

In unraveling the concept of discomfort, we find that our behavioral tendencies mask a deeper neurological pain linked to our evolutionary history.

For us advisors, grasping the root causes of our clients' discomfort can lead to crafting more effective and empathetic strategies. It's not as daunting as it seems. Our ancestors have laid the groundwork; it's up to us to ingeniously build upon it.