Forty Two Wealth Management principal Alan Dick has pledged to change the way he presents his proposition after research suggested consumers are more likely to commit to an offering if they have been offered a choice.
Dick, who is also vice president of the institute of Financial Planning, said his firm would embark on an experiment to test the findings of a recent study Single Option Aversion.
The study, published in the University of Chicago's Journal of Consumer Research, suggested that consumers can react negatively when choices are too restrictive.
"Isolating an option, even temporarily, may increase how much consumers search and potentially the likelihood that they make no purchase," author Daniel Mochon wrote.
He added: "Companies should consider how options are presented to consumers. Restricting options can have lasting effects on choice. Consumers who are initially offered only one option are more likely to continue searching for alternatives even when other options are later presented."
Dick said his firm, which usually streamlines its proposition into one offering based on a fully comprehensive financial planning service, will in future also offer a reduced version alongside, which will give consumers a choice.
He said: "We've seen a number of times recently that people have said they really like our proposition but still haven't come on board, or have taken so long to come on board because they were dithering over should or shouldn't they.
"I wonder if [offering a choice] will convert some of these people quicker because it removes the reticence of taking the only option in front of you. We'll try it on a few people and see how the response is because ultimately we still only want a proper financial planning relationship."
Dick added he was surprised by the findings of the research as he thought it was in the best interest of consumers to not overload them with information and offer them one easy-to-understand clear option instead.
"We've been trying to streamline everything to the best answer. And it seems counter intuitive that the way to get people to action the best outcome is to give them another couple of options that aren't as good," he said.
Dick suggested that behavioural studies such as this one could have a major impact on the future of consumer-facing financial services.
"This concept and this kind of research has to have a big impact on our industry as we are starting to get a much better understanding of how people make decisions."
However, he also suggested that the industry needed to keep a close eye on the potential pitfalls that could come with such knowledge, such as manipulation practices akin to recent scandals including payment protection insurance misselling.
"The danger is that people can manipulate things in a way that you make people do things that aren't in their best interests and clearly we have to be very weary of that.
"With the knowledge that comes from this kind of research also comes an ethical responsibility which is one of the marks of our profession."
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