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By Jerry Buchko, MA, AFC®


One of the interesting things we may take for granted in our work as personal finance practitioners is that as we develop ourselves as professionals, that is, as we study, obtain our certifications, pursue continuing education, and build up our experience over the years, we become more knowledgeable. And we take for granted that this knowledge is a benefit, because it allows us, naturally, to become more effective in our work with the people we serve. This makes sense. And it makes so much sense it’s fair to say we often regard it as simply a common sense truth.

But can greater knowledge ever present a problem for us as practitioners? Can it ever, contrary to our common sense assumptions, get in the way and cause us to actually be less effective in some situations?

Two notions from cognitive and behavioral economics research, the curse of knowledge and hindsight bias, suggest this can sometimes be the case. The curse of knowledge describes a tendency to become so knowledgeable in understanding something that it comes to seem rather simple, as if it’s “just common sense.” We tend to forget the work it took for us to develop that understanding, and, as everything comes to seem so obvious to us now, we’re left wondering why everyone else doesn’t just “get” this common sense stuff too. Hindsight bias describes a particular challenge related to the curse of knowledge, the difficulty we can have remembering and reproducing the understanding and perspective we had before we became so knowledgeable. Graphic for Practitioners Corner

So how can being aware of the curse of knowledge and hindsight bias help us as practitioners? One benefit may be the awareness that these tendencies can leave us with an important blind spot in our perspective of the people we serve. Our clients often come to us knowing relatively less than we do as trained and experienced professionals, or they might even know really nothing at all about all this “common sense” personal finance stuff.

This blind spot can leave us to make assumptions about our clients and what they’re capable of, and these assumptions can greatly influence how we interact and communicate with them. Many of us as practitioners have learned from experience that people can have a tendency to live up or down to our expectations of them. These expectations can have a profound influence on how our clients may come to perceive themselves and their sense of efficacy. This is important to take into consideration if one of our most fundamental goals as practitioners is supporting our clients in becoming more confident and effective in their financial lives.

The influence of these assumptions on our interactions and conversations can also affect whether we seem credible and approachable to the people we hope to serve, so they can affect our opportunity to have a positive impact as a resource (even before someone has a chance to actually work with us).

Remembering how the world of personal finance looked and felt when we were still uninformed novices can also give us an important frame of reference. It can sometimes help us figure out more effective ways to approach the information we have to share with our clients, and to more effectively help our clients bridge the gap between their current understanding and what they hope to better understand with some effective support and experience.

So what do you think? Are there other ways the curse of knowledge and hindsight bias might influence us and the work we do as practitioners? What other aspects of being an effective practitioner do you think would be important for us to think about and explore?

Further Reading: (2012). ‘I Knew It All Along…Didn’t I?’ – Understanding Hindsight Bias – Association for Psychological Science. Retrieved 1 October 2015, from

Wikipedia (2015). Curse of knowledge. Retrieved 1 October 2015, from

Wikipedia (2015). Hindsight bias. Retrieved 1 October 2015, from