Clients may have more confidence in financial advisers who use precise numbers, rather than those who round them up or down, new research from the University of California, Los Angeles suggests.
People who use more-specific numbers — such as citing a 6.4% return instead of a 6% return — are judged to be more reliable sources and are more likely to be tapped by others for advice, according to a recent study co-written by Danny Oppenheimer, associate professor of marketing and psychology at UCLA.
“For advisers, if you give more-precise estimates, people will think you are more confident in your decisions and may be more inclined to trust you,” Mr. Oppenheimer said.
Most previous research on what conveys confidence focused on physical cues, such as eye contact, posture and whether one makes nervous gestures. This research suggests that specificity with numbers as a confidence booster works even when the information is delivered through written forms of communication.
NO NORMAL CUES
“So much more communication is happening today in ways that people don't have normal cues,” Mr. Oppenheimer said, noting the increased importance of e-mail and social media in business.
In the first part of the study, 187 undergraduates were asked to read 10 questions and estimate the confidence level of the person who had answered each one. The answers all involved numbers, but some offered precise measures, such as “2,611 miles,” while others gave imprecise answers such as “2,600 miles.”
Participants judged those who answered with more-specific digits to be more confident, Mr. Oppenheimer said.