Choosing and Changing Financial Advisors: An ƑMRI Study of Associated Brain Activations

15 Pages Posted: 20 Feb 2013


Changing financial advisors during an advisor-intermediated stock-market game was more likely during periods of relative underperformance. Immediately prior to changing advisors, brain activation was greater in areas associated with error detection (dorsal anterior cingulate cortex) and number comparisons (inferior parietal and middle frontal gyri). This combination of activations was analogous to those associated with choosing to stop chasing losses in a gambling task. Advisors may consider using heuristics from gambling research and investment practice that re-characterize loss experiences as something other than errors. During non-switching “quiet” periods, subjects were more likely to be focusing on the images of advisors, reflected by activation in face-specific visual regions. These results may support client-retention strategies emphasizing personal connections rather than pure numerical performance.

Keywords: financial planning, fMRI, neuroeconomics

Suggested Citation

James, Russell N., Choosing and Changing Financial Advisors: An ƑMRI Study of Associated Brain Activations. Journal of Financial Counseling and Planning, Vol. 23, No. 2, 2012, Available at SSRN:

Russell N. James (Contact Author)

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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