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Facing up to finance

2nd October 2019
Posted by Aston Avery

Sticks and stones may break my bones, but words will never hurt me… unless you’re talking about an investment ISA or mortgage that is. New research from a pioneering experiment at Goldsmiths University that used an adaptation of the Emotional Stroop Test found that almost two thirds (62%) of Britons experience a stress reaction in response to financial jargon.

The study, in partnership with Barclays Smart Investor, saw more than 60 participants presented with over 100 colour-word combinations of neutral, financial and investment terms. The experiment tasked them to name the colour of the word, whilst timing their reaction speed. The slower the response time, the stronger the emotional response that the word triggered in the participant.

Investment terms were found to cause participants the most distress, with ‘stockbroker’ having a reaction time 11% slower than that of a neutral word, and ‘asset manager’ and ‘investment risk’ following behind at 8% slower.

And the effects don’t seem to stop with emotions, as almost a fifth (17%) of participants broke out in a sweat in response to the experiment, whilst 44% reported an increased heart rate and over a fifth (23%) experienced muscle twitches.

Aston spoke to Professor Jonathan Freeman, Professor of psychology at goldsmiths university of London to discuss the reactions that humans experience when coming into contact with financial jargon and Dr Peter Brooks, head of behavioural finance at barclays to discuss the wider psychology behind people’s fear of finance.