First off is the assumption that clients should tell clients/prospects what they want to hear. Not exactly an approach that meets the fiduciary standard of always working in the clients best interests.
Apparently clients care more about being diversified than being disciplined (because I guess they are sure they can do that without an advisor) and investors by more than 2:1 care more about maximizing gains than avoiding losses....exactly the opposite of what is the case in reality and every research starting with Kahneman that looked into this.
But it is a good reason to explain bubbles and busts investors chase markets to "maximize gains" minimize their concern with minimizing losses while it is not happening. When those large losses occur ...they sell in a panic.
from the wsj
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