Nearly three in ten Brits (28%) will shun the opinions of experts and instead seek advice from family and friends when making important life decisions – such as where to invest their money.
A social experiment, with more than 1,000 participants, showed that adults are one-and-a-half times (or 54%) more likely to turn to advice from those closest to them, than professional sources, in all areas of life.
When it comes to financial advice, half of those surveyed are more likely to ask family and friends about where to invest money – with 40% relying on their opinion even when it comes to high-risk investment choices over any other sources, including experts.
And one in five (19%) would be most likely to seek their partner's advice on budgeting decisions, while 15% would rather take financial advice from a TV show than turn to an expert.
In fact, the opinion of a banker ranked 8% lower than any other financial advice sources when it comes to budgeting matters.
The term “social proof”, coined Dr. Robert Cialdini in 1984, refers to the unconscious influence those around us have on our decision-making, with one aspect being the “wisdom of friends” – which refers to the phenomenon where advice from peers carries much more weight than is wise in important choices.
During the experiment, commissioned by new investment app “&me” – which gives consumers access to tailored portfolios and expert advice – researchers found participants are largely unaware of this effect.
According to the findings, even when people say they value expert knowledge, they often revert to the opinions of those closest to them when making a key judgement call.
&me collaborated with Dr Briony Pulford, associate professor of psychology at the University of Leicester, to delve into why people are so unduly influenced by friends and family when it comes to making life decisions.
Commenting on the experiment carried out by behavioural scientists at Mindlab International, Dr Pulford said: “We prefer advice from friends and family because we instinctively trust them and believe that they have our best interests at heart, knowing our preferences and personal values, and taking those into account when advising us.
“Essentially, they “speak our language”.
“But this research tells us that we are overly influenced by friends and family in many situations, rather than seeking out experts.
“People have a “simplicity bias”, preferring a simple narrative rather than one that has more complexity – even if the complex one is more accurate, realistic, and balanced.
“Many want to fit in with their peers, so finding out that other people do something makes you more likely to do it, too – this is “social proof”, and it makes people feel more reassured that they are making the right decision.”
Further supporting research of 2,000 adults revealed that almost a third have made a big life decision – such as whether or not to get married, leave a partner, or change careers – based solely on the advice of those closest to them.
And only 32% say they would consider the guidance from both those they’re closest to, as well as a professional.
But while seven in ten claim never to have been given bad advice on a big life decision by family or friends, 22% say they have been badly advised by their nearest and dearest on issues – with 72% saying their advice actually led to a negative outcome.
Half of those polled, via OnePoll, have even stopped being friends with someone who gave them bad advice.
Unsurprisingly, as a result, four in ten confessed to wishing they’d sought more expert advice before making a big life decision.
Gut instinct is critical to 84% when it comes to making life’s biggest decisions – while some people reveal they use rather more unorthodox approaches.
Four in ten (41%) write a list of pros and cons, 12% delegate responsibility and let someone else make the decision for them, 9% flip a coin, and 8% consult a clairvoyant.
Riaan de Bruyn, from investment app &me, which provides access to a team of dedicated consultants to help people invest, added: “Of course the opinion of our friends and family matters, but what this research proves is that we must be mindful and selective about when we take it, and who we take it from.
“Everyone likes to consider themselves an expert, but sometimes this can cause misplaced confidence.
“When it comes to serious decisions, whether they be personal or financial choices, it is important in many instances to take on board expert opinion.
“The research showed many would turn to their friends and family for advice on where to invest their money.
“We would caution you to think twice about this approach, and recommend taking advantage of accessible financial expertise.”