Financial advisors should be aware of the gap between the evolution of technology and that of human nature, according to a noted American neuroscientist and former spy.

Eric Haseltine, the former director of research at the U.S. National Security Agency was addressing attendees at the FPA Business Solutions 2010, a conference of the Financial Planning Association in Dallas on Monday.

“We have a Version 1.0 brain in a 50.0 world,” he said.

To illustrate his point, Haseltine noted Moore’s law, a popular theory that states technology becomes twice as sophisticated every 18 months, a condition experts predict will continue for another 10 years. But human technology has remained the same for 15,000 years — since the mid-paleolithic era.

Haseltine pointed to an earlier discussion at the conference indicating that although client relationship management systems are getting more and more sophisticated, few advisors are using them to their full potential. That is because of the same quirk of human nature that resulted in the displays in most VCRs blinking ‘12:00’ in past decades.

“Why are iPods, iTunes and iPhones the winners?” Haseltine asked. “Not because they’re good, but because they create a user experience that is simple and appealing.”

Meanwhile, Haseltine added, the components of advisors’ CRM systems that are complicated are probably left unused by advisors and their staffs. “That is typical human nature,” he said.

Our reluctance to adapt to new technology and other forms of change is hard-wired in our systems, accordng to Haseltine. People resist change because trying something new doubles the brain’s consumption of calories. In a dangerous paleolithic world, burning more calories would increase the likelihood of starvation.

Understanding these features of human nature can help advisors better serve their clients through improved communication and by persuading them to adhere to financial planning principles. The key is to to work with these characteristics rather than against them.

“You can never fight human nature,” Haseltine said. “You will always lose.”

Here are some the ways advisors can work with, rather than against, their clients’ natural tendencies:

• deliver tomorrow’s payoff today. You will be much more successful if you figure out a way to give clients some reward instantly;

• make what at first appears hard appear easy. Good financial planning isn’t necessarily difficult, but your clients may think it is, Haseltine said. Give them images and examples that emphasize the simplicity of the process;

• create a rich, emotionally moving experience;

• if you want clients to see something, put it in a place where they are looking;

• create social reinforcement. “We are social animals,” Haseltine said. “Anything you can get people to do as agroup is going to be more effective.” This could mean involving couples or, in some cases, other family members, in client meetings.

Before joining the NSA, Haseltine was executive vice president of Walt Disney Imagineering, in charge of all R&D for Walt Disney Co.

“I often say it’s because I became a spy that I’m a brain scientist gone bad,” he said. “And it wasn’t clear whether going to work for Disney or going to work for the intelligence community was more evil.”

IE