Photo: PLoS ONE
Looks matter more than reputation when we entrust others with our money, according to a study by Warwick Business School in London.Using 20 pairs of neutral Caucasian faces, researchers altered trustees’ features using Facegen software to make them look less or more trustworthy. The picture on the right gives a sense of what characteristics were seen as trustworthy ((big eyes, raised eyebrows, a slight smile versus a frown, downcast eyes and a narrow gaze.)
Volunteers were then given money and asked to choose which face to entrust their money to. On average 13 of the 15 participants invested with people who looked more trustworthy.
“Trustees with good and bad and histories benefitted equally from trustworthy-looking facial features,” said Dr. Chris Olivola. “The temptation to judge strangers by their faces is hard to resist … we are still willing to go with our instincts about whether we think somone looks like we can trust them.”
If you’re concerned about getting screwed out of your money, here are some quick ways to tell your broker is shady per YM contributor Rob Pegoraro:
They’re a generalist. Anyone who works will “all ages and backgrounds” should raise a red flag. “No one can be all things to all people and be really good at his job,” says Pegoraro.
Useless advice. A good, proactive adviser won’t give you excuses, he’ll give you answers. If he’s been saying the same thing since 2008, it’s time to ditch him.
Basing plans on hope. This is like basing your retirement savings on thin air. “Your income and lifestyle shouldn’t depend on the markets, they should depend on maths,” Pegoraro says. “Work with a specialist who builds an income plan using quantifiable mathmatics.”