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Graphic for Practitioners CornerBy Jerry Buchko,  MA, AFC®

Another insight from the social sciences and the study of cognition and decision-making is one that I’ve found especially interesting, because it seems so ingrained in our experience that it’s hardly noticed at all. It’s called naive realism.

Naive realism is a strong general bias we seem to have in our day to day interpretation of the world. Specifically, we commonly behave in ways that suggest we believe that we see the world objectively, and, further, that people who disagree with us must be uninformed, irrational, or biased. This tendency seems to be founded on three fundamental, interrelated assumptions or beliefs about our experience of the world around us:

  • The belief that we see the world objectively and without bias.
  • The belief (and expectation) that others will come to the same conclusions and views as we do, so long as they are exposed to the same information and interpret it in a rational manner.
  • The belief (or assumption) that those who do not come to the same conclusions and do not share our same views must be ignorant, irrational, or biased.

Like most studies of cognitive biases, there’s a body of serious study and experimentation that methodically shows how these commonly held and comforting beliefs don’t hold up under closer scrutiny.

So what has this meant for me as a practitioner? Basically it drew my attention to how easy it is to fall into this way of thinking, even now when I’ve learned about all of this and should know better. It’s made me realize how seldom I have all the relevant facts, that much of what I can get ahold of is filtered through the lens of my own personal set of biases, and that others can filter the same limited set of facts and come to very different conclusions.

Understanding this has also reinforced the importance of dialogue and assessment throughout my time working with my clients. My knowledge of the subject matter of personal finance doesn’t give me awareness of the circumstances of my clients, and it doesn’t give me awareness of their subjective views and understanding of themselves and their circumstances. And both are important for me to understand clearly in order to be more effective supporting my clients.

So what do you think about this? Is naive realism something you’ve experienced or seen at work in your clients? Are there other ways in which this insight that naive realism offers is relevant in our work?


Further Study:

Wikipedia (2015). Naïve realism (psychology). Retrieved 10 December 2015, from (2015). YANSS 062 – Why you often believe people who see the world differently are wrong. Retrieved 10 December 2015, from