The Missing NIL Variable: Openness

In Part 1, I introduced the idea that personality is a missing variable in the NIL conversation.

Today’s post will specifically look at the trait of Openness in the OCEAN model of personality. A deeper understanding of this trait may provide insight into one of the biggest challenges of NIL which is the spending behavior. Openness is described as an individual’s appetite for novelty, new ideas, and new experiences. Highly open people are curious, imaginative, and drawn to possibilities. They're energized by the next thing on the horizon. These folks are often creatives who may love to travel and seek novel experiences. Whereas people lower in openness may prefer routine and doing things in a repetitive way.

In the world of sports, highly open athletes are open to suggestions and willing to try new things to grow and develop on the field. However, they may be challenged by the repetitive nature and behaviors that excellence in a field or sport often requires. On the flip side, athletes with lower openness scores may have challenges in the opposite direction. They love the grind and routine of day in and day out execution but may struggle adapting to the novelty that often arises in a sports setting.

High Openness and Money:

Openness and its interaction with money is no different. There are strengths and blind spots with high and low scores. Highly open athletes may enjoy learning and understanding the underlying fundamentals and features of financial markets and specific products which can lead to better decision making.

The challenge with high openness is that new is not always better. Sometimes, the fundamentals of money are timeless truths for a reason and abandoning them can be costly. Much like pitching in baseball, maybe the pitching mound would be better at 58 feet from home plate, but we’ve all agreed that 60 feet is the standard, and debating this would be an unproductive waste of time.

In financial markets, new products are consistently being developed. Some work; some don’t. The general economy also has trends that can capture our attention. Below is a summary of just a few in the last 25 years:

• The dreaded dot com boom/bust with internet stocks that traded at 30-50 x sales, often with little to zero profits

• Leveraged mortgage-backed securities largely responsible for the Great Financial Crisis

• Meme coin pump and dump schemes

• The SPAC blow up off the heels of COVID-19 and rising inflation

• Private credit blow up of 2025 with Blue Owl

The allure is similar in each scenario. Shiny new things that make promises of “outsized returns” and generally abandon the tried-and-true principles of being a disciplined, long-term investor. For the highly open person with a love for learning and new experiences, these trends can be hard to pass up. Not to mention that can’t miss opportunities are often presented to athletes by well-meaning family members and friends. Personally, and anecdotally, athletes seem to really enjoy investing in bars and breweries. I’ve yet to see one of those pay off other than with a cool T-Shirt to remember the experience.

Considering the above, the natural question arises−what is an advisor/coach in this space to do?

The key to coaching an open person is not to stifle the trait but to create boundaries and structure around it.

Practically speaking here are some suggestions that may help:

• Educate. Educate. Educate. Think about “How the watch is made” and not just what time it is. This prevents the misperception of “missing out” on the latest fad.

• Create a separate account for the purpose of “investment exploration.” Each year, take a small percentage of the liquid assets and give freedom to invest in new ideas. Make sure it’s small enough that a total loss would not be catastrophic to the plan.

• Build mandatory “deliberation windows” around significant financial decisions. Think of the individual as a company, and create their own personal board to process and vet ideas and opportunities

• Grow your personal talent stack as an advisor. Many times, challenges with highly open people come when there is a perceived knowledge gap between the advisor and client.

  
  

Low Openness with Money:

As previously discussed, people who are lower in openness are often more resistant to change and find comfort in consistency. Many times, this protects them from bad investment pitches. However, change is sometimes necessary in a world and an economy that is constantly moving and dynamic. An aversion to adjusting a financial plan, even when circumstances warrant, may lead to missed opportunities and a continuation of suboptimal behaviors and habits that may have been passed down by family or their early environment. You likely can think of someone that never places any money in “the market” because of a family member who lost it all in one stock. Instead, they may opt for the safety of money market accounts and CDs. Admirable, but given enough time, inflation will erode their newfound wealth.

Coaching up the low openness athlete is more about reframing perspective and expanding their horizon than it is restraint on spending and ideas. However, people low in openness may not enjoy the learning process it takes to be proficient with money. An advisor to athletes must take this into account and build processes that work for this trait. Ideas could be explained in shorter learning sessions built around the fundamentals of investing. Keeping it simple and repeatable will likely work well.

Keep in mind that people have multiple personality traits, and the five traits combined create various personality profiles. Next time we’ll dive into Conscientiousness—the trait we at Wealth Science call “the wealth trait”. Hang with me, after we unpack each trait, I’ll bring it all together by outlining 3 general personality profiles and offer ideas of streamlined strategies that may be helpful for each.

- Connor Jones, CFP®

Connor Jones is a former professional baseball player and financial planner at Wealth Science Advisors in Alpharetta.

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