The last time Malcolm Gladwell appeared on this list was in 2013 for David and Goliath. Gladwell has lost none of his gifts in Talking to Strangers, a book that is not about the strangers we encounter in our daily lives, but, rather about how the assumptions about people we desperately want to understand often lead to unhappy outcomes. Advisors can learn a lot from the stories Gladwell tells. The main theme of the book is why we so often misread people. The toughest people for us to read are those who are “mismatched”—those who are either a liar behaving like an honest person or an honest person acting like a liar. Paradoxically, it’s easier to “see” such people accurately when you don’t interact with them in person. Bernie Madoff was mismatched and easily hoodwinked almost everyone he met. Harry Markopolos, the one person who saw right through Madoff, made it a point not to meet him in person. The more we assume about a stranger, the more likely we are to get it wrong. Some of the stories in this book are ripped from headlines, some from The History Channel and books, but the theme that binds everything together is how wrong we are at interpreting the behavior of people we don’t know. An appeal to psychologist Timothy R. Levine’s theory that humans have evolved a “default to truth” is part of it. If advisors come away from this book considering how their interactions with clients and prospects are subtly undermined by the societal structures that encourage making assumptions, both advisors and their clients will be better served. 

In the history of corporate frauds, the case of Theranos and its founder Elizabeth Holmes may eclipse Enron for sheer audacity. It’s now clear that a 20-year-old Stanford University dropout hoodwinked so many accomplished men—and that they were all men is part of the fraud. This is the tale that Pulitzer Prize winning Wall Street Journal reporter John Carreyrou tells, and it’s a step-by-step recipe for how to cook up a fraud (step one: seduce a high-powered but clueless board) and how that fraud was painfully unmasked by a dogged reporter. But to really understand Holmes’ deception, it’s better to watch the HBO documentary The Inventor: Out for Blood in Silicon Valley, because then you will experience the mesmerizing impact of Holmes. Observe how she cast a hypnotizing spell on virtually everyone she met, because she does the same to the viewer. What is it about her? It starts with the voice. An otherworldly low alto eventually revealed to be pure affect. Unblinking eyes of deepest blue. Blond hair in a casual bun setting off the black turtleneck borrowed from Steve Jobs’ closet. The image captivated even seasoned investors and attracted luminaries such as board member and former Secretary of State George Shultz who comes off as a particularly pathetic figure.

Holmes’ big idea was a minilab that could take a pinprick of blood and perform dozens of blood tests in walk-in clinics. Most scientists regarded the idea as unworkable—and in fact it was unworkable. But Holmes never met a fact she could not ignore, spin, or reject in her ambition to create a machine that could perform dozens of tests on a drop of blood. The promise was grand; the execution a shambles. Despite many warnings, Walgreens sunk over $150 million into empty promises. The second half of the book narrates the reporter’s attempts to unmask Holmes. She does not go down without a fight. As for the main question—did Holmes stumble into fraud as a consequence of Silicon Valley’s “fake it till you make it” ethos, or was she bent from the beginning? Carreyrou inclines toward the former. I’m not sure which conclusion is more threatening to the trust so vital to the orderly functioning of markets.

What is it about habits? I received no fewer than six books on habits published this year from publishers hoping to see their books on this list. All the books agree that to break any habit, we must become aware of what habits are. All agree, effective habits are effective precisely because they hide their workings from our consciousness. After that, there’s a lot of conjecture and bad science chasing the subject of habits. Wendy Wood’s book Good Habits, Bad Habits is the best of the lot because her conclusions are evidenced-based. The key insight is that habits refer to how you perform an action, not what that action is. That means that self-control and self-discipline never go far enough. The way to create new behavioral patterns that will eventually become second nature is to engage in habitual, repetitive action. Say you want to stop looking at your phone during lunch. The book offers a clear strategy that applies to all habits. The first step is to control the context cues that activate and enable phone use. Add friction to make phone use more difficult. Move the phone to a zippered pocket or purse. To really kick the habit, stack a new healthy action onto your existing cellphone habit. Decide that every time you check your phone, you must call one member of your family just to say you care about them. It’s a good thing to do and it might even help build relationships that the habit you want to break has damaged. Professor Wood sometimes gets lost in academic jargon—she defines a habit as “automaticity in lieu of conscious motivation”—but the book actually gives readers actionable tools to replace habits with conscious choice.

Let’s face it. Financial advisors are virtually indistinguishable from each other. Advisors sell the same products, charge the same fees and work out of interchangeable offices. So how are they to compete? This slight book—it can be digested in 25 minutes—reveals the powerful truth that the best story gets the sale. The challenge is to be the best storyteller you can be. That takes practice, yes, but also a deep understanding of the four types of story genres: rags to riches, quest, rebirth, and leave home and have an adventure. The author offers his hacks on getting your foot in the door and overcoming objections. As for objections, welcome them. They are a sign the client is engaged. Take energy from it. Most of all, slow down. The most successful salespeople pause immediately after an objection five times longer than their less successful peers. The author describes three types of returns for the client, only one of which—return on investment—do most advisors address. Just as motivating is Return on Attention and Return on Wisdom. Chapter 5—Getting People to Lean In—introduces the powerful concept of future pacing  your client. The book concludes with good tips on making effective presentations.

This passionately observed memoir is candid and vulnerable, two attributes many CEO memoirs lack. Chuck as he is known (“Talk to Chuck” was the tagline of a very successful Schwab marketing campaign rolled out in 2005) has done more than anyone to democratize investing, lowering fees and empowering average investors to participate in the clubby world that was closed to them. Many readers will be familiar with the broad contours of Schwab’s success. But Invested invites readers under the tent as the company battled the dirty tricks of Merrill Lynch, realized the monumental mistake Chuck made when he sold his company to Bank of America and then extricated the company shortly thereafter. Unlike with most corporate memoirs, Schwab is not afraid to be critical and name names. But Chuck reserves his most merciless criticism for himself. He recounts his failures as a student, father, husband and executive. He recounts his struggles with dyslexia. Yet his basic decency, respect for the investor, and impatience with the swindles and conflicts rampant in the financial services industry burn red-hot. The book offers readers Schwab’s insights on investing, leadership, philanthropy and political activism. The main lesson is that culture trumps everything. When a leader gets culture right, all manner of setbacks become manageable. Invested is a primer on putting culture first.

A common frustration of advisors is the difficulty of guiding clients to make decisions that they will celebrate in the future (say, when they reach retirement age) and how easy it is for clients to make decisions today they will regret tomorrow. This story-driven book is really about how to help people hone foresight, to act for the sake of a future they desire. The book starts by explaining why clients have so much difficulty. The future is murky, mutable, uncertain. Clients can’t touch, smell or hear the future. Meanwhile, nothing is more palpable than their immediate needs, often experienced in the gut as a craving. To really help clients hone foresight, advisors have to make the future as real as the present. The title of the book quotes the economist A.C. Pigou’s observation in 1920 that shortsightedness is rooted in our “faulty telescopic faculty.” The optimism in the title is the author’s own. The former climate advisor in the Obama administration insists that shortsightedness is not an immutable human condition. Citing a range of stories and research studies, she describes how people battle and overcome shortsightedness across a range of problems and settings. Saving for retirement, for instance, becomes easier if clients can imagine their retirement more vividly. When volunteers are shown photos of themselves digitally altered to simulate their appearance in old age, investment rates go up.

Capital and labor are always in tension. In 2015, the big book of the year was Capital in the 21st Century, which argued that income inequality stems from increased returns on accumulated wealth. Now The Meritocracy Trap argues the opposite, that most of the share of national income from 1970 comes from returns on labor, not capital. If you think of the rich people you know, maybe you will agree as you reflect on how hard—or at least how many hours—they work. Markovits, a professor at Yale Law School, argues that meritocracy has been gamed by the 1% as “a pretense, constructed to rationalize an unjust distribution of advantage.” The book neatly predicts the college admissions scandal by observing that elites have set up their children to out-achieve everyone else by means fair and foul, and then justify their privilege as the fruit of “merit.” This is a deeply disturbing indictment of not just universities but of a hiring system that perpetuates unearned privilege.

So why should advisors read this disturbing book? It offers a new perspective on income inequality, the prospects of the middle class, and the unsustainable advantage of the 1%. And to the extent advisors feel secure serving and even identifying themselves with the 1% in the name of meritocracy, maybe they ought to pause. They may soon find themselves de-skilled into irrelevance. To the extent that middle-class Americans find that the American Dream has passed them by and the future of the children of the 1% has been purchased at the expense of their own children, then the entire edifice may soon crumble as no society can long endure when it cannot live with its conscience. One doesn’t have to agree with every point the professor makes, but every thoughtful advisor needs to be conversant with the arguments Markovits sparks.

The best advisors do a better job of seeing around corners. They have a keen eye toward identifying and exploiting inflection points. An inflection point occurs when a change—what some people call a 10x change—upends the assumptions a system is built upon. Whenever a system has a sufficient number of badly served constituents, an inflection point has a fertile ground to take root. That’s a condition currently afflicting much of the financial services industry. This book offers advisors a bold approach to strategy formulation and management in a disrupted world. The strategy starts with creating incentives that encourage everyone to engage with reality. A big insight is that since change happens not at the center but at the edges, it behooves change agents to get outside the office as much as possible. You can’t find inflection points from the corner office. Inflection points are conspiring right now to upend your business. Read this book and get out of the office to find the future that is happening right now.

When you consider how life in American has gone downhill since 2000 (think 9/11 and the endless wars since, the financial meltdown of 2008, loss of faith in every political institution, embittered political divide), you may ask how did we get this way? Transaction Man provides some of the answers. Coupled with The Meritocracy Trap, this book outlines how all of the components that defined “the American Dream” have unraveled so quickly. Lemann, the former dean of the Columbia Journalism School, tells the multithreaded story through four mostly unknown or forgotten characters. One is Adolf Berle, an advisor to FDR. Another is Robert Baldwin, head of Morgan Stanley in the 1970s. The economist Michael Jensen and a GM car dealer in Illinois round out the mix. Centering the book on these four characters and their friends, families and colleagues situates the lofty themes of the book on recognizable human levels. Making appearances are luminaries such as Bill Clinton, Peter Drucker, Reid Hoffman, Alan Greenspan, Milton Friedman and dozens of others in a sprawling account of how Wall Street, in the service of maximizing shareholder value, dismantled the corporate and government structures that created so much long-term investment and distributed prosperity. Advisors who aspire to serve a mix of investors will find much in this book helpful to better understand the dynamics that shape investments in an economy dominated by transaction men.

Imagine walking into an elevator with three of your Wall Street colleagues. The doors close and stay closed. “Welcome to the escape room,” displays the elevator panel monitor. “Your goal is simple. Get out alive.” Bonuses have just been distributed and three of the four investment bankers in the elevator are angry enough to kill. In alternating chapters, we meet Sara Hall as she recounts her experience working at Stanhope and Sons. Slowly readers come to understand what awful things the colleagues trapped in the elevator did to merit their predicament. Meanwhile, through Sara’s innocent eyes, we see finance types crazed by greed and arrogance as they prey on each other. Back in the elevator, a series of clues are presented. As the hours wear on, secrets are revealed, a pistol is brandished, blood is drawn. The thrills are real, but what earns this novel a place on this list are the finely observed truths about the plight of women professionals in financial services. Does the escape room actually offer an escape? No spoilers, but it may be that evading any escape room—literal or metaphoric—may require us to first change who we are.