#FinSci: Psychological Capital – Can It Improve Financial Services?

#FinSci???

#FinSci is a new idea I have for a series of posts on this blog, kind of like #advisorhacks, but hopefully with greater frequency. The idea is to take cues from the fascinating field of science and apply them to financial services. I suspect that much of the #finsci posts will pertain to psychology, should this series make it past post #1, but that’s to be seen.

What is psychological capital?

Today’s inaugural post on psychological capital comes from a recent article in the Scientific American titled, What You Need To Succeed–And How To Find Out If You Have It. The article begins,

New research suggests that your own ability to get things done—not to mention your success in non-work relationships—is highly correlated with how you see others. Are your coworkers capable and kind, or are they, dare I say, incompetent jerks?

When they say “your own ability to get things done,” what they mean is, your ability to succeed at work, since most (all?) work involves the doing of things. The article continues,

It turns out that such opinions are tied to a key component of achievement called psychological capital, a mixture of efficacy (self-confidence), resilience (you believe you can bounce back from setbacks), hope (you believe you can achieve your goals) and optimism (you expect good things to happen in the future). As a concept, psychological capital reflects our capacity to overcome obstacles and push ourselves to pursue our ambitions. Not surprisingly, scoring high on this measure is linked to markers of success: being promoted, winning awards, popularity with peers, stability of marriage and even longevity.

Questions for finance professionals:

It’s easy to read the paragraph above and think, duh!?, obviously people who are confident, resilient, hopeful, and optimistic are more successful! But let’s consider it for a moment in light of the business of financial advice:

  • How does your own level of self-confidence manifest in your client-facing self, whether in-person or through social media, and how does that impact your trustworthiness?
  • How have you dealt with missteps in the past? Have you been open and honest about them? How does this effect your self-confidence and trustworthiness?
  • Do you have any pipe dreams for your advisory business? Are they just pipe dreams, or, somewhere deep down, do you believe that they are attainable? What’s stopping you from taking the first step towards realizing your goals?
  • Recessions, robo-advisors, lazy Gen-Yers — there are a lot of things working against the business of financial advice right now. How optimistic are you about your job security, success, and the ability to maintain your livelihood? What can you do right now to be better (shit, the BEST) at your job?

I’m just spitballing here, but this post definitely raises some interesting questions when you reflect it through the prism of finance. Drop me a comment or hit @blueleafadvisor with an RT and show us some love if you’re feeling the finance science theme, #finsci!

DJ DJ is a freelance writer, hopeful photographer, and social media has-been. He writes to financial advisors about lifehacks, science, technology, business and marketing for Blueleaf, a software that helps create dramatically simpler, more scalable financial advisory businesses. You can find DJ across the web (about.me/djswitz) or you can just follow him on Twitter (@djswitz)!