Orion Advisor Solutions

The BIG List of Behavioral Nudges

The Brinker Capital Behavioral Innovation Lab translates academic behavioral finance research into practical nudges for financial advisors, including strategies like fostering long-term goal visualization, labeling accounts by purpose, engaging clients in self-directed problem solving, highlighting behavior-goal discrepancies non-confrontationally, establishing behavioral contracts, encouraging self-monitoring, providing education on behavioral best practices, invoking anticipated regret to motivate clients, and automating processes to improve financial decision-making.

The Brinker Capital Behavioral Innovation Lab was founded in response to a very specific problem: The enthusiasm advisors had for behavioral finance was not being matched by the number of practical solutions. The Lab's role is to take academic learning and make it practical for financial advisors.

A comprehensive list of behavioral interventions curated by University College London was reviewed, and many techniques were found applicable to financial advice. Below are practical nudges with suggestions for application:

  • Take a long-term view: Help clients make the future more salient by discussing future goals, detailing specific plans, and encouraging them to imagine themselves or loved ones in future scenarios (e.g., nearing retirement).
  • Name your dollars: Label accounts relative to their purpose to encourage appropriate behavior, leveraging our tendency to create mental buckets for money.
  • Client-directed problem solving: Engage clients in the process of identifying and improving their own behaviors, as self-originated ideas are more persuasive.
  • Discrepancy between current behavior and goal: Gently highlight inconsistencies between stated goals and current actions (e.g., wanting to retire early but spending excessively) using a non-confrontational approach like the “Columbo method.”
  • Behavioral contract: Create a written agreement specifying desired behaviors and timeframes, ideally signed by both parties.
  • Self-monitoring: Guide clients to monitor their own decisions and behaviors at set intervals and report progress during meetings.
  • Education: Use meetings and events to educate clients on best behavioral practices, emphasizing “metaknowledge”—knowing what you don’t know and when to seek professional help.
  • Anticipated regret: Help clients imagine the regret of not achieving financial goals to make those goals more salient and motivate positive behavior.
  • Systematization: Automate processes to reduce reliance on willpower and discipline, turning status quo bias into an advantage.
  • Goal setting: Collaboratively set specific goals, focusing on daily behaviors needed to achieve them, and keep these goals central in planning conversations.
  • Look for emotional triggers: Identify situations that lead to suboptimal financial decisions (e.g., comparative greed, retail therapy) and work to avoid or manage them.
  • Reduce negative prompts: Help clients avoid contexts that trigger poor decisions, as willpower is limited.
  • Behavior substitution: Replace undesirable financial behaviors with healthier alternatives rather than trying to eliminate them without a substitute.
  • Habit formation and shaping: Break large behavioral changes into smaller steps and encourage incremental progress, offering support along the way.
  • Behavioral practice/rehearsal: Use role-playing for behaviors like difficult financial conversations to reduce anxiety and improve outcomes.
  • Consider past outcomes: Review clients’ past financial decisions and family money scripts to anticipate future behaviors.
  • Pros and Cons: Use simple T-charts to help clients at decision impasses by listing the advantages and disadvantages of choices.
  • Comparative imagining of future outcomes: Make future scenarios more real by having clients imagine different possible outcomes.
  • Stress management: Incorporate lessons on physical wellbeing, diet, and exercise to help clients manage stress, which can impair financial decision-making.
  • Framing: Present requests and goals in a positive, empowering way to increase clients’ sense of capability (e.g., living on 80% of income vs. saving 20%).
  • Identification of self as a role model: Encourage clients to recognize their influence on others, such as children, to motivate better financial behavior.
  • Pre-mortem: Ask clients to anticipate what could go wrong in the future to help diagnose potential issues before they arise.

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