Welcome to the 72nd edition of #theFutureReadyAdvisor Newsletter!
Subscribe & join the conversation. Share comments and feedback.
The most dangerous phrase in any organization is ‘This is how we’ve always done it.’ But the second most dangerous? ‘Trust me, I know what’s best for you.’
I was the quintessential Chicago School believer. Economics undergraduate degree, MBA, corporate law and investment banking background. I lived and breathed the efficiency of markets and the rationality of actors. When I moved into wealth management from investment banking twenty plus years ago, these principles guided everything. Build the optimal portfolio, present the logical case, and rational clients will make sound decisions. Simple.
By 2008, I was building an ultra-high-net-worth business where 1 out of 4 of Canada’s 100 wealthiest individuals were our clients. We were ranked #1 in our category for four straight years. I thought I had this figured out.
Then the financial crisis hit, and everything I believed about rational decision-making shattered. I watched billionaires panic and liquidate blue-chip positions. Risk-taking entrepreneurs who the year before were hunting for exotic private equity deals suddenly couldn’t sleep at night holding blue-chip bank stocks. These weren’t unsophisticated investors but some of the sharpest business minds and risk-taking individuals in the country.
That’s when I realized traditional finance wasn’t enough to explain investor behavior. More importantly, I discovered that the harder I pushed logical arguments during the crises, the more my clients resisted. I was experiencing psychological reactance in real time, and it was costing relationships.
When Expertise Becomes the Enemy
The 2008 crisis taught me something profound about human nature: the moment people feel their autonomy is threatened, logic goes out the window. Psychological reactance, first identified by researcher Jack Brehm in 1966, describes our automatic response when we perceive our freedom of choice being restricted. We don’t just resist the restriction; we often do the exact opposite of what’s suggested.
For financial advisors and business leaders, this creates a dangerous trap. The more urgent your advice feels, the more likely sophisticated clients and team members are to reject it. It’s not about the quality of your analysis, it’s about them preserving their sense of control.
During the crisis, I first made every mistake in the book. When clients wanted to sell everything, I presented detailed portfolio analyses showing why they should stay invested. When they expressed fear, I countered with historical data about market recoveries. When they questioned our strategy, I doubled down on our expertise and track record. Each logical argument only strengthened their resolve to do the opposite. It was a matter of luck, persistence and a great team, more than behavioural insight, that we were able to keep most of our assets and clients intact during this turbulent period.
The billionaire who built a tech empire didn’t need me explaining market efficiency; he needed to feel heard. The entrepreneur who’d navigated multiple recessions wasn’t looking for historical context; she needed to maintain her sense of control during chaos. But I was so focused on being right that I forgot to be effective.
The Status Amplification Effect
But then I learned. And what I learned from working with ultra-high-net-worth clients is that psychological reactance intensifies with success. These individuals didn’t build billion-dollar companies by being told what to do. Their entire identity is wrapped up in making smart, independent decisions. When you present advice as “the right answer,” you’re not just challenging their choice, you’re challenging their competence.
This dynamic makes intuitive sense when you consider how these individuals built their wealth. Research from German universities studying high-net-worth individuals shows that wealthy people are less agreeable (more likely to challenge authority) and more focused on maintaining their autonomy. Their success becomes psychological armor that deflects outside influence, even when that influence could help them.
This dynamic plays out everywhere in today’s world. Look at the political polarization around COVID-19 public health measures; the more mandates were pushed, the stronger the resistance became in certain communities. Consider the backlash against ESG investing principles; regardless of performance data, some investors reject sustainable strategies simply because they feel morally mandated. Examine return-to-office policies; companies presenting logical arguments for in-person work often face the strongest employee resistance. Much of the passionate and sometimes even violent debates about social and political issues occurring in the world today can be attributed to psychological reactance. People rebel against being told how to think, feel or act.
In each case, the pushback isn’t really about the merits of the position, it’s about preserving autonomy in the face of perceived pressure.
The Modern Tribalism Connection
Psychological reactance doesn’t just affect individual decision-making, it creates and reinforces tribal divisions. When people feel that their group’s values or choices are under attack, reactance spreads through entire communities. We see this in investment circles today: active versus passive management camps becoming more entrenched when challenged, crypto maximalists versus traditionalists taking increasingly extreme positions, fee-only versus commission-based advisors defending their models against all evidence.
Social media algorithms amplify this effect by creating reactance echo chambers. When we encounter content that challenges our views, the natural reactance response is to seek information that confirms we’re right and the other side is wrong. This is confirmation bias at work. This isn’t stupidity, it’s human nature protecting our sense of autonomy and competence.
For leaders and advisors, this means traditional influence tactics often can backfire spectacularly. The harder you push your expertise, the more certain your audiences will push back. The more urgent you make your case, the more suspicious people become of your motives.
A Different Approach: The Art of Influence Without Pressure
After 2008, I completely rebuilt my approach to financial advice and building businesses around a simple principle: people support what they help create. Instead of presenting finished analyses, I started with questions. Instead of delivering recommendations, I facilitated discovery. Instead of proving I was right, I helped clients arrive at sound decisions themselves.
Here’s what this looks like in practice:
Start with Curiosity, Not Conclusions: Rather than “You need to rebalance your portfolio,” try “What’s your sense of how current market conditions might affect your long-term goals?” The first triggers reactance, the second invites collaboration.
Honour Their Expertise: With sophisticated clients, acknowledge their knowledge: “Given your experience building companies, how are you thinking about market volatility right now?” This approach respects their competence while opening space for guidance.
Create Choice, Don’t Remove It: Instead of “Here’s what you should do,” present options: “I see three potential approaches here. What resonates with you?” People rarely resist choices they feel they’re making themselves.
Make It Their Idea: Use Socratic questioning to help clients discover insights independently. When they reach conclusions through their own reasoning process, reactance disappears; it’s their idea, not yours.
This isn’t manipulation. It’s recognizing how human psychology actually works. The most effective advisors and leaders don’t overcome reactance, they design around it.
The Implementation Challenge
Understanding reactance is one thing, consistently applying these insights under pressure is another. During market volatility, when clients are making emotionally driven decisions, every instinct tells you to jump in with facts and logic. But that’s exactly when reactance responses are strongest.
The solution lies in what researchers call “implementation intentions”: pre-planned responses to predictable situations. For advisors, this might mean: “If a client expresses panic about market conditions, then I will first ask what specifically concerns them most before offering any analysis.”
For business leaders managing change initiatives: “If team members resist new processes, then I will explore their concerns and involve them in solution design rather than explaining why the changes are necessary.”
These frameworks work because they redirect our natural impulse to convince and correct, channeling it into more effective influence strategies.
The Future of Leadership in a Reactant World
We live in an era where expertise is simultaneously more valuable and more resented than ever before. Information abundance means everyone has access to data, but wisdom about how to interpret and apply that information remains scarce. Yet the more we assert our expertise, the more we risk triggering reactance in the people we’re trying to help.
The leaders and advisors who thrive will be those who learn to influence through invitation rather than assertion. They’ll master the art of guiding people toward sound decisions while preserving their sense of autonomy. They’ll understand that being right isn’t enough; you have to help others discover rightness for themselves.
This shift requires humility from those of us trained in traditional models of expertise. It means recognizing that our knowledge is only as valuable as our ability to share it in ways that don’t trigger defensive responses. It means accepting that the best solutions often emerge through collaboration, not prescription.
If this resonates — if you’ve seen firsthand how logic alone doesn’t change minds — I’ve built something that might help. It’s a self-paced course for financial advisors and leaders who want to deepen their behavioral coaching skills and gain a real advantage in a market where technical expertise is no longer enough. You’ll learn practical tools, real-world scripts, and proven frameworks to guide complex decisions — all grounded in what actually works with sophisticated clients.
👉 Explore the program here https://shop.samsivarajan.com/b/tFLou
The journey from Chicago School certainty to behavioral complexity hasn’t always been comfortable, but it’s made me a better advisor and leader. It’s taught me that the most powerful influence often comes not from what we know, but from how we help others discover what they need to know.