Taking financial advice: Going beyond making good decisions

When making financial decisions concerning money management, people often use recommendations from professional advisors. Turning to experts who know better and relying on their knowledge, skills or competence may increase the likelihood of achieving beneficial decision outcomes. However, as we propose in the present chapter, both searching for professional recommendations, and evaluating the quality of the source of expertise, may sometimes go beyond the need to make only optimal decisions, and can be driven by motivations that are independent of accuracy. In particular, we argue that when people are confronted with a necessity to evaluate the quality of a certain expert, they use their own beliefs as a reference point, and tend to depreciate recommendations which are at odds with those beliefs. In other words, our idea, supported by the results of a series of studies, points to the psychological role of the confirmation effect when taking advice. The present chapter shows that taking financial advice may fulfil psychological needs that go beyond simply searching for professional support and that are associated with the protection of the advisee’s sense of self-worth.