Both dentists and financial planners struggle with cognitive dissonance, a key concept in behavioral finance. Cognitive dissonance describes when newfound information contradicts a client or patient’s preexisting understanding and therefore someone only registers information that affirms the status quo.
Dentists and their hygienists’ greatest value is often the preventive care that they provide. Through the fundamental schedule of cleanings and monitoring of tooth decay, plaque buildup, and gum health, they often can assess and correct problematic health situations before they grow into something far more catastrophic. Often times the diagnosis of a decline of gum or tooth health is a precursor to more grave health issues that may not be seen by a doctor or the medical professional until far later.
After working with and having conversations with several dentists over the last few years I have realized that there are many parallels between running a dental practice and running a financial planning practice. Many of these parallels have to do with behavioral finance. The first similarity between the two are that dentists and financial planners rely on “nudges” to help impact positive behavior of their patients and clients. A “nudge” is a concept borrowed from behavioral economics that essentially means building structures in such a way as to encourage the proper outcomes.