Principal-Agent Misalignment
Whoever acts on your behalf — adviser, broker, agency, executive — has interests that differ from yours, and the gap grows with what they know and you do not; incentives, not intentions, predict their behaviour.
An everyday example
A commission-paid adviser recommending the product that pays the commission; a manager optimising the metric their bonus tracks.
What it can cost you
Trusting the agent's advice as if it were yours; designing incentives that pay for the wrong thing.
Warning signs
- Their advice always points toward their pay.
- I cannot verify what they tell me.
One thing to do
For any agent, ask how they are paid and what they know that you do not; align pay with your outcome or add independent verification.
Is this happening to you right now?
Describe your situation and get a read across all six brains. No account needed.
Check my situationRelated
Not medical, legal or financial advice. How Decision IQ works
One decision idea a week
One useful idea. No daily drip, no pressure.