You know the drill. After a long hard day, you’re ready to settle in, switch off your brain and find an easy film to watch. That is until you stumble across something that clicks the old grey matter back into gear.
This happened to me the other night when I caught Dead Poets Society (1989) starring the late, great Robin Williams. For a self-confessed film nerd, I’m ashamed to say I’ve never watched it in its entirety.
In case you’ve not seen it, Williams plays the role of John Keating; the new English teacher at an elite American boarding school for boys (set in 1959). Through their study and his somewhat anti-establishment stance, Keating encourages the boys to question social norms, live authentically and strive for truly independent thought.
Yes, it’s a little schmaltzy and predictable, but its core messages are nonetheless inspiring (that’s my Barry Norman bit done for this week).
One very well-known scene in particular got me thinking about certain aspects of financial planning with our clients.
Keating begins a lesson standing on his desk and asks his bemused-looking students (before inviting them to join him):
“Why do I stand up here? You see the world looks very different up here…just when you think you know something, you have to look at it in another way. Even though it may seem silly or wrong, you must try”.
This approach to life and learning appeals to the idealist in me. If we constantly questioned our opinions and assumptions, our insights would remain forever fresh and relevant, and we’d all live happily ever after.
But how realistic or practical is this?
When you assume…..
People are capable of many great things, but one thing most of us don’t do well is challenge our long-held assumptions and beliefs.
Now there’s nothing wrong with assumptions per se. They act as useful rules of thumb that enable us to make decisions quickly and efficiently. This is fine if the beliefs are well-tested but if not, your snap judgments may be hindering you rather than helping you. Even worse, they may prevent you from making any decisions at all.
This is as true in financial planning as it is any other walk of life.
Many of our clients are active or retired business owners, professionals and senior executives. They’re extremely intelligent and rational people, but even they’ve been prone to taking stances and decisions that go against their best interests due to deeply-ingrained but limiting beliefs.
It’s human nature. One poor experience (first or second-hand), the endlessly negative news cycle, the bloke down the pub who struck it lucky with Bitcoin and the innate desire to try to keep up with the Jones’s – you need a very thick skin to prevent experiences and noise from influencing your subconscious thoughts.
But just because these are fixed in your head and easy to recall, it doesn’t mean they’re right.
Stop me if you’ve heard this one before
A few assumptions presented by prospective clients (and carefully explored) during recent conversations include:
“Pensions are a dud investment”.
“Stock markets have performed badly for a number of years now”.
“My business is my pension”.
“Property is the best place to put your money”.
“Trusts and Inheritance Tax planning aren’t worth it – it’s all too complicated”.
“I’ll hold off from investing until markets fall after Brexit”.
I’m not suggesting that life-altering epiphanies were achieved through these conversations, or that I personally hold the key to any ultimate truths.
But at the very least, there was an opportunity to look at some long-held assumptions from several different angles (none astride the desk I might add). In several instances, it led to some sensible financial decisions being made – in my opinion anyway – based on a balanced view of the available ‘facts’.
In other cases, some simply weren’t comfortable re-evaluating their beliefs, and that’s fine. You can’t help or communicate perfectly with everyone.
My point is that your financial planner (as well as being technically proficient) should be willing and able to have challenging conversations with you.
Not to show off their technical knowledge, and certainly not to achieve some form of one-upmanship. The person that stands to gain most from this aspect of a financial planning conversation is you.
Exploring limiting beliefs encourages clear, independent thought and can inject a healthy dose of reality, which should result in you making better financial decisions with a greater degree of confidence.
What beliefs, financial or otherwise, might be holding you back from making meaningful progress with your financial plans?
If you feel it’s time for a refreshing conversation about your financial goals, there’s no time like the present, so don’t hesitate to get in touch.
Thanks for reading.