So the idea of layering was to say, well we know if you give people a lot of information, they can easily become overwhelmed and just not read it. And when they don’t read it often they will do nothing or they’ll stick to the default or they’ll do what they always did. And if those things are in the client’s best interests, if everything’s fine, if their investments are doing all right, if they’re matching their target asset allocations in their risk profile, they’ve got right amount insurance, if everything’s fine, maybe it’s no problem. However, if you’re an advisor who actually wants to get your clients to do something, become a client to start with, implement some advice, I don’t know, do some stuff, then you’re going to have to worry about this.
And so the idea of layering’s to say giving them a whole load of information’s a risk of them doing nothing, so how can I break the information into bite size pieces and give them one piece at a time? So I’m just going to give them one little piece, wait for them to consume that, digest it, then give them another piece, and then give them another piece, then another piece.
And you see this all over the place, this is how Google search works. You put your Google search in, you get a headline or maybe a link and a one line sentence from the website and if you want you can click on that and you’ll get the website and then there’ll be stuff and you click sort of lay. News is the same. If they gave you a massive article, you’re not going to read the whole thing, you get the little picture, you get the headline, maybe you get a half a sentence or whatever it is, you can click on it, you get half a page, then click for more, you get more. So you sort of see it as quite an effective strategy.
Now, in the context of advice, what does that mean? It means, what is the main thing I want to get across to my client? What is the thing I want them to do or to think or to feel? I want that right up front. So if it’s an email, the header of the email, I want the message in the email. So instead of it saying market update, for example, yeah okay, fine, that’s a market update, but I have to read the email, then work out what’s happened. It could say market’s up strongly over the last three months. I just made that one up, maybe it’s a bad example, market’s down. Anyway, you get the point is that the point is to put the main point easily, accessibly upfront. Then the next layer might be a bit of content in the email, which shouldn’t be too lengthy. And then there might be another layer which is, And here’s a link for more information, or here’s a video. So I’ve got layers.
Same with my SOA. Here’s the main points in the executive summary, then here’s the body, then here’s all the analysis and appendices and reports and other things at the back if you want it. Same with the PowerPoint slide. Header tells me what the main message is, then maybe there’s some subpoints and then maybe there’s some bullet points with the detail. So in each of these cases it’s just about, it’s not about the content itself, it’s just about how it’s presented and trying to put it into small pieces that can be consumed.
And chunking, the other one you mentioned, is a similar idea. So I’m trying there to reduce the burden on people’s short-term memory. So the problem is that people, you’ve probably heard people can hold between five and seven chunks of information. I find this quite amusing, I often give people a little memory test and they really struggle and they get a seven. But the trick here is they’re chunks, so if you can find a way of getting all of that information and putting into one sort of chunk that organizes that, one sort of aggregation of that information, then instead of it being five small pieces that I struggle with, now it’s one bigger piece. And actually I can have five of those bigger pieces.
So this one is saying… Well, this is the archetypal example. You see a PowerPoint slide and it’s got 15 bullet points on it. The problem is by the time I get to bullet point eight, I’ve forgotten bullet point one. So if you are my advisor and you want me to think about all this sort of stuff, you have to realize that I can’t keep all that in my short term memory, therefore I can’t process it together.
So what you need to do is you need to chunk it into groups, so maybe take those 10 or 15 items, group them into three or four subheadings. Three or four, that’s fine, I can cope with three or four. Then if I want more information about those three or four, then I can see the bullet points in there.
So again, I think when I look at my clients and how I help them, often it’s not about the content itself, it’s just about packaging it in a way that’s less sort of cognitively demanding for the client. It just seems easier and therefore when it seems easier, they’re more likely to engage, more likely to read it, more likely to understand it, more likely to act on it.
Yes. Good tips. Very good tips. Onto something a little bit different, and the reason that I raised this as a question is that, as a country that our demographics are becoming older, it means that advisors are typically starting to deal with older and older clientele, and we know that cognitive decline is part of that. So it’s something I think advisors need to be aware of.
Do you have any tips or thoughts around how people can potentially deal with clients that perhaps maybe that cognitive decline has started to kick in a little bit? How do we deal with that as an advisor fraternity?
Yeah, huge topic, and I don’t have a silver bullet, but I think at least we can glean some insights from what the research around what that cognitive decline looks like. So what does that research tell us? Well for a start, cognitive client isn’t uniform, so it doesn’t just mean I become less and less intelligent. So you can break intelligence into a couple of pieces and we can break it into many pieces, but a way it’s often broken is between what’s called crystallized intelligence, which is about my experience and the buildup of my knowledge over time and how I apply that. And that’s actually not that… there’s not much detrimental impact on that. That can go quite sometime into my… through my retirement, and I can still function quite reasonably well on that basis.
But what tends to decline more so is my fluid intelligence, which is my problem solving, my ability to take sort of unique, dynamic environments and work through them and work out what the problems are and the solutions. And with that comes numeracy and some of the