The Big Takeaway: Research supports giving that pretty face a once-over when thinking about your financial future.
Sometimes our decisions about the financial success of others can be biased by something as superficial as attractiveness. Researchers have found that we tend to favor those who are attractive even if it may cost us money in the long run due to our propensity to equate attractiveness with trustworthiness. This “Halo” effect can impact the way we make decisions about not only financial partners (e.g., a spouse) but also has implications for choosing business partners or even in the choice of who provides us with professional advice. Researchers in a Cornell University study found that: “When choosing from a group of financial partners with the goal of making the most money, participants…favored attractive partners over unattractive partners even if they weren’t the most profitable because they perceived them as more trustworthy.”
While the research study cited here was in a lab setting, there are some implications for the real world. Consider your past decisions when it comes to choosing professionals to help you. Or, perhaps consider how you’ve hired new employees in your organization or small business. Have you substituted one characteristic (e.g., attractiveness) for another (e.g., competency in a specific area)? To put a check on the Halo effect in the future, gather references and get second opinions about the professionals you engage to provide service, especially in critical areas like financial planning, accounting, and legal advice.
