Advisor Blog Central

Back in flight school, my instructor told me “Your body will lie to you…don’t trust it!” When you think you’re flying straight and level…you could actually be in a slow spiraling downward dive…or even upside down…and never know it by looking outside the plane or by how you feel internally. This can kill you very quickly and you need to learn to trust your instruments.

I want to believe we are in a recovery. My emotional equilibrium is telling me that we are at historic buying levels and I should be bullish. I want to tell you that I see the end of the nightmare and your business is on its way back. But every time I look at the instruments they are saying the storm is not over for our economy nor for our industry.

In every meeting I do, I ask my audience the same question, “How many of you can’t wait to leverage yourselves up and start spending more money?” CRICKETS! “Now, how many of you are looking for ways to cut back, reduce spending, do more with less, stretch your car for another year, save more, reduce your debt and your consumption?” EVERYONE! I realize this is an unscientific poll, but any economic scenario that is based on the cheerful return of the consumer is, in my opinion, a non-starter and a dead-wrong strategy.

There are many speakers out there on the circuit singing “Happy Days are Here Again” and I think they’re letting their body lie to them. They are allowing an all-too-recent memory of past market declines tell them that when it goes down it must come back up. If they have any experience at all…they may remember the Crash of 1987 which ranks up there with Y2K as the great non-event. This is a different world. What I’m seeing is a continued downward slide and a depressing market environment for some time. I think smart professionals must build this scenario into their business model. Even if I’m 180 degrees off…it’s still a smarter way to help people.

This means new investment strategies, new marketing approaches that brand you as a realist and a serious, caring professional, and new ways to talk with clients honestly about their future and the changes required to get them home safely. It means action and hard work…not sitting around thinking about what to do. Get moving again…and watch what happens to your attitude and your business.

The image that pops into my mind when I think of the ideal advisor in today’s world is Gene Hackman’s character Reverend Scott in the Poseidon Adventure.

He quickly accepted the reality of the upturned world and he recognized the tremendous change of thinking that was necessary to survive. The “experts” said he was wrong but he stuck to his guns with passion, logic and determination. He tried to convince people to join him but he didn’t waste too much time arguing with the un-savable. He knew that quick action was essential and that apathy would end in death. He used all his resources (like Ernest Borgnine and Shelly Winters) and improvised when necessary. Ultimately he led his small flock to safety. And if you forgo the typical Hollywood ending…he did a damn good job for his people.

Folks…this ship is under water and likely to stay there for a while longer yet. The consumer is down for the count. The government has shocked the economy with about 3 trillion volts and it ain’t moving off the table. When the false glow from an overly optimistic “stress test” wears off (bend down, touch your toes) we might find that we’re in deeper trouble than we think. Get your people up to the engine room and out to fresh air. Be as bold and creative as you can be. This is a time when leaders are made!

What’s the appropriate way to thank a neighbor you just met who spends two long days helping you build a fence and who won’t accept any payment?  That was my quandary.

Bob and Mary Lane have a beautiful picket fence around their modest and well-manicured yard here in Harmony.  My wife saw it and decided it was the perfect fence to keep the grandchildren in our yard, and the deer, wild turkeys, and sand hill cranes out. 

I stopped by Bob’s house one evening to introduce myself and ask about his fence.  He said he built it himself and said if I decided to build one, he would be happy to help, as long as I didn’t ask him to dig the post holes.  He seemed truly genuine and I knew I didn’t have the handyman skills to build a fence myself, so I told him I’d take him up on his offer.

I ordered the materials and called Bob when they arrived.  On the Saturday before Martin Luther King Day, he and my son Paul and I built the fence for several hours.  At his insistence, he returned the following Monday and worked nearly the whole day with us.  His experience and keen eye for detail were invaluable.  I absolutely could not have done it without him.  And if I say so myself, the fence looks great—mostly thanks to Bob.

And what counted for more than building a fence was building a new friendship.  As you might imagine, we told a lot of stories out on the fence line.  There’s something about sharing hard work and stories that turns strangers into friends.But Bob’s generosity was troubling. 

How could I thank and repay someone I only recently met who cheerfully gave not just one but two whole days to help a neighbor in need?  Having them over for dinner was a given, but that wasn’t enough.  Offering money would be insulting, but I had to do something.  Fortunately the answer came to me Monday as we worked. 

In the course of our conversations, Bob told me that they have seven children, including three married daughters who live within a block of their house.  One of those daughters, their middle child Amanda, 33 years old and the mother of a five-year-old daughter, was dying of breast cancer.   She had fought it a couple of years earlier, successfully they thought, but it had returned with a vengeance.  This time it was taking over her whole body.  Fence building, Bob said, was good therapy to get his mind off her plight.

I responded by telling Bob about my 32-year-old mother and her fight against throat cancer.  I told Bob about my mother’s letter, and how it inspired me to develop tools like “Priceless Conversations” to help people like Amanda share love messages with their children, their spouse, and others.  I told Bob about my book, Like a Library Burning.  I told Bob I wanted to repay him in part by helping his daughter share and save her legacy.  From the tears in his eyes, I could tell Bob was touched and grateful for my offer.

Bob left that afternoon with a copy of my book for himself and a copy for Amanda.  The next day I took them three Priceless Conversation tool kits—“My Child” for her daughter Addison, age 5; “Love” for her husband Shawn; and “Legacy” for the rest of her family.  Amanda thanked me and said she would read the questions and call me when she felt well enough to talk.  She also asked some legal and financial questions that I was able to answer for her. 

Sadly, she never called.  Bob phoned last week when I was in Scottsdale and said Amanda and Shawn wanted to see me Tuesday to address some of their legal and financial issues.  He said Amanda had been in constant pain and on medication, and didn’t feel she could complete a Priceless Conversation.

I met with them Tuesday afternoon and discovered a couple of really critical insurance issues that needed immediate attention.  Amanda told me she really wanted to do the Priceless Conversations, especially the one for her daughter, and as soon as she felt a little better, she would do it.  She was afraid her little girl might not remember her very well if she didn’t.

On Wednesday, Bob and I took care of those pressing insurance issues, but Amanda still didn’t feel that she could talk.

At three o’clock Thursday morning, Amanda passed away at home in her sleep. 

*   *   *

Amanda’s death hit me hard.  It hurts that we failed to capture her words and her voice and her stories.  I feel like a frustrated fireman—I rescued the money, but the library burned down while I looked on.  This wasn’t supposed to happen on my watch. 

The family is planning a memorial service on the 28^th of February, which would have been Amanda’s 34^th birthday.  Before then I’ll give Bob and Mary the “Tribute” Priceless Conversation and offer to facilitate it for them when their family is together again.  That will afford them an occasion to remember Amanda and tell their favorite stories about her and save those stories for her daughter.  It’s the least we can do for little Addison; I hope it will be enough.

Yes, you!

In the February Harvard Business Review, Campbell, et. al. wrote an article entitled, "Why Good Leaders Make Bad Decisions." Their premise is that we are all set up (neurologically - we just can't help it) to be swayed by often-unrecognized biases. Couldn't have said it better myself! The key point here is not that we shouldn't be swayed (remember - we just can't help it). Rather it is that we need to have ways to recognize our biases and their source so as to make the best possible decision.

Recently, I coached one of my clients about the extent of his responsibility/duty to his clients regarding advocacy. It seems this client is in the final phase of merging with another firm. However, there is an open issue about funds that haven't been released to his clients and, when he leaves, he will no longer have the ability to do anything to help his clients. So he is stuck for as long as it takes because of his emotional ties. Does he go ahead with the merger? Does he wait, possibly as long as a year, so he can remain in a position to step in if necessary to help his clients resolve this? There is no one answer that would be universally right in such a situation. It seems that either way, he will lose something that is important to him.

In exploring this together, my client came to realize the emotional "hook" of both choices! He was hooked by his beliefs that he had promised to "take care of his clients needs no matter what" and that by merging with the other firm, "all [his] stress with his work would be resolved and he would be free." Once those beliefs were revealed, he could explore them more rationally and discern what was true. In fact, he came to realize that he isn't obligated to the extent that he couldn't make the best business choice (in merging) for himself and his clients, nor will merging provide him with all the freedom he is imagining. From this more objective perspective, he could begin by identifying his ideal outcome for all concerned and work toward creating that.

Reality is, well, reality. It is as it is. The more conscious we are of our underlying motivations in decision making, the clearer and more effective our decisions will be. Bias is always lurking. We can't help but see things through our own filters of self-interest, skewed observations and false interpretations. The key is to know that is always in play, to notice it and then to step back to a more rational view.

Congrats to Andy Gluck for launching the “Financial Crisis Webinar Series,” featuring recognized pros presenting valuable insights and information in a real-time platform. I’ve found them all helpful, but the session on April 3, Compliance Issues Posed by LinkedIn, Blogging, and Social Networking Sites, was particularly germane to contemporary communications, as was Andy's last webinar on Twitter.

Financial advisors, of course, are bound by hard rules and regulations when it comes to talking about what they do, how they do it, and the results they get –and most of those rules were created before the Internet. As Brian Hamburger and Daniel Bernstein reminded us, compliance issues apply to new media, too. Anything we say, claim, or endorse online may live forever – and may be against regulations to boot. Using so-called “social networking sites” like LinkedIn and MySpace with the intention of building your professional financial services business can be very tricky territory, so watch your step.

But here’s a thought. When we consider the ash heap around us – the general chaos and loss of trust and faith in our financial industry – we see opportunity if we look for it. With so many “recognized leaders” gone, there is enormous potential for emerging leaders – with integrity, patience, intelligence, and grit – to step forward and introduce themselves, their character, and their viewpoints.

One new social media site, Twitter, is helping them do that in a rather unconventional way. The idea behind Twitter is to answer the question, “what are you doing?” in a very short message limited to 140-characters. That message, known as a “tweet,” is broadcast to your network of “followers.”

When I first heard about Twitter and its premise, my reaction was like that of my 4-year old grandson when he really doesn’t understand something – an incredulous, “Huh?”
I was both skeptical and intrigued. I thought the idea was stupid. Who cares what I’m doing in any given moment? And why would I care about what others are doing in any given moment? Plus who has the time to invest in learning about and effectively using yet another new communications technology?
But I was curious, too. So I signed up, thinking what the heck. I had to at least learn about Twitter with all the buzz about the vibrant “message microcosm” it enables.
Now, two months later, I get it.

In Twitter, it’s all about following and being followed. You create and participate in self-selected networks of people, all twittering away, keeping each other posted on their lives. I have 240 followers and I follow 240 people – which means I have a personal glimpse at a wide range of people’s day-to-day lives – and they have a peek at mine, too. Many celebrities and politicians are active tweeters. If that sounds strange to you, it did to me, too, especially the part about having “followers.” Who are these people? I know some of them, but since Twitter is a viral phenomenon, there are people following me that I haven’t had the pleasure of meeting, which I find fascinating. And following someone is fascinating, too.

For example, I follow NPR newsman Scott Simon because I admire his work. I found his tweet about how his daughters turn the cardboards from his shirts into art projects quite endearing. There’s something about “micro messages” like that that help me come to know much more about someone’s day-to-day character.

Which brings me back to the point. I’ve invested significant time and effort learning about Twitter. I post tweets twice a day, to express my worldview – not as a marketing tool for my business. And within the past month, I’ve gotten three new contracts and a slew of promising prospects – almost as a side effect. People got to know me first – and then wanted to know more about doing business.

Short-form technologies like Twitter may be the tools that will help restore eroded trust and build new connections because they force us into tightly focused communications (what are you doing?) that reveal so much more than you’d ever imagine 140-characters would allow.

Is Twitter just a faddish tech trend? What could Twitter do for you? What on earth would you tweet about?

You cannot produce this level of invitation and safety for your clients to tell their stories unless you regard them as your thinking equal. As the professional mind, you are not the superior mind. Your client’s intelligence and ability to think about their life and future and legacy and plan are equal to yours. When you know that, really know that, you will listen differently and they will tell you different stories at deeper levels than if they sense the subtle disdain, infantilization and impatience, and need to show off that is the demeanor of the professional who assumes they are the client’s thinking superior.

So for a moment let’s look at Equality.

In fact, let’s back up. Let’s think about this: Do we really believe in Equality? Really? I mean really, as in cross our hearts?

Equality shows up in just about every official list of Values. Of course we believe in it. Equality, right at the top of the list. You know, the list of Values that hugely expensive consultants pull out of us and then print onto hugely expensive panels and mount along often hugely expensive walls.

Equality. Sounds good. Definitely looks good. And most days we think we mean it. But, for example, have you ever stopped yourself dead in your tracks on the way to a client meeting and thought, ‘Hmmm, now, do I really believe in Equality? Really? Are my client and I actually equal as Thinkers?”

No, you probably don’t stop and ask that. My experience of organizations and families and relationships is that they are not dotted with individuals suddenly immobilized by that question.
And, imagine, if we were to stop people in the halls ourselves and say, "Hi, uh, just a quick question—do you believe in Equality? I mean, really, really believe in it? Just curious." And smiled. How crazy would that look? (Actually, stopping anyone these days on the way to anything, even the bathroom, is regarded pretty much as an aggressive act. So add in that question and no telling how short your career there would be.)

So, do we believe in Equality? I wonder. I think we say we do, the way just about everyone said, “All men are created equal” and meant, “except for the slaves.” And even if we mean it a bit, enough to march for voting rights and equal pay for equal work and equal opportunity (whatever that means), what we most likely don’t mean is that we are all equal as thinkers.

When stopped in the hall, many professional advisers, if they didn’t lock us up first for asking, would say, “Actually, no, I don’t believe in equality of thinking; some people are simply better thinkers than others. And as a professional it is my job to do the thinking. I was educated to do that, and I get paid to do that. Now, please, have a good day.”

Here is an analogy: let’s equate the mind of our client with state-of-the-art equipment. Cost? A billion dollars. It has two switches, M and F. M for miniscule capacity; F for full capacity. Let’s decide at every meeting with a client to switch it to miniscule. Let’s waste 1 billion dollars every hour. How about it? This makes the nut in the hall asking the Equality question look pretty sane.
But, let’s say you say, okay, I need my client’s mind on full. “How then,” you ask, “do I make that happen? Because, believe me,” you say, “a lot of my clients can’t seem to string two original thoughts together even when I ask them to, and when I ask them questions, there is usually not an explosion of light bulbs, I can tell you that.”

No doubt. But do one simple thing, and light bulbs, both of ideas and of stories, will explode. Regard your client as your thinking equal. Really, really—as in cross your heart and hope to die. Because, once you truly regard them as your equal, you will listen differently, more deeply, more respectfully, with more ease, with no shred of impatience and no urgency to get the focus back onto your thinking.

Another word about us as Professionals. Our education simply does not prepare us for the critical fact that our clients are our thinking equals. If anything, our education nearly bludgeons us with messages of superiority, including the message that our future clients expect that superiority, too. That, in fact, is what they will pay us for. What is the point of the professional if the client can think and come up with answers just as well?

The point of the professional is to be a Thinking Environment for the client so that they can think for themselves brilliantly and discover the best way forward. The professional may also have information and experience to share that may be of great value. May be. Sometimes truly is. But that should be only about 30% of the interaction. Because when people go to professionals, whether for legacy and estate plans or a return to health or paths to reach goals, what they are really looking for first and most of all is a person who wants to know what they think, who they are, what matters to them, and what their life-shaping stories are. Only after all of that do they want to be given advice.

A professional’s first job—a leader’s first job—is to create the conditions for people to think for themselves, saturating it with implicit and explicit Equality. Professionals in all fields need to understand and act on this. Because, boy, can it cost, if it doesn't. Here's an example.

A surgeon, standing scrubbed with both gloved hands in the air, called for the scalpel. The faceless attendant handed it to him. The doctor settled the scalpel just over the left upper abdomen. His hand moved, revving before piercing. In spurts the voice of the attendant next to him squeaked, then spoke, "Dr. Jones, with all due respect, that is the wrong side." The doctor suspended his hand an inch over the body. He turned his head to find the head of the voice. He froze his eyes on the voice's eyes. "What did you say?” The attendant took the breath that precedes words. Before the words came, the doctor shouted, "I know what you said. And I caution you, don't ever, ever do that again. The attendant's hands began to shake. "But sir, it is the right kidney that is damaged." "I warn you, Ms. Reynolds. You are seriously out of line."

The doctor cut into the left side, removed the left kidney, ordered the patient sewn up, and then he returned to his rounds. The next day he was summoned to the hospital chief executive’s office and dismissed. Six months later his medical license was withdrawn. He had removed the healthy kidney.

Now that was expensive. And at fault there was only one tiny thing: the assumption of inequality. Sprinkled of course with avalanches of arrogance. Not an unusual combination. Similarly, the still worst airline crash in history, Tenerief 1977, seems almost certainly to have been caused by the pilot’s rejection of Equality in the cockpit. When, for the second time, the flight engineer questioned the pilot’s decision to take off in dense fog without firm clearance and unable to see another jumbo jet still on the runway, the pilot shouted at the engineer and accelerated full speed, cutting seconds later into the body of the other plane, killing 583 people.

Again the divesting of Equality and the donning of arrogance. A literally deadly combination. This is what can happen when Equality and Attention are missing between people.

By Spenser Segal, ActiFi CEO

I was at the FPA Business Solutions conference last month and thought that it was an excellent conference. There were many informative speakers who shared some very practical ideas. One thing I kept thinking about was how advisors were going to actually execute and leverage these ideas and concepts to bring value to their clients and their business.

When working with clients, we use the following model to help our clients conceptualize how to look at information and good ideas. The model is as follows:
Data => Information => Knowledge => Behavioral Wisdom

This model has been used in many forms. The most useful way to use the model is to understand the challenge of moving from the left to the right, with the biggest gap being moving from Knowledge to Behavioral Wisdom. There is an overabundance of data and information floating around and it is impossible to process it all. What remains difficult, but nevertheless achievable, is people’s ability to change their behavior and adopt new behaviors in a consistent and effective way.

What struck me at the conference was how much great information and knowledge is available to advisors and how little of it is effectively implemented. One of the things that I am personally committed to and want to see happen is for more advisors to adopt powerful ideas and information into their practices. In this difficult environment, it is critical for advisors to build better businesses and deeper client relationships. Now is the time to adopt this model and focus on developing behavioral wisdom so that the proven concepts and ideas actually benefit our clients and all the advisory businesses out there.

In order to effectively do this, advisors need to recognize how difficult human behavioral change is and balance the resources they allocate to implement new ideas. Many times advisors buy a new software package or instruct their staff to implement a new idea in their business, but do not spend the time to understand the impact on their processes and more important, the impact on individual employees’ job responsibilities.

A balanced approach to implementing new ideas involves spending approximately equal amounts of time on evaluating and purchasing technology or the idea, documenting and understanding the impacted processes, and change management as it relates to the specific employees who will be impacted.