I’ve always enjoyed Carl Richards’ sketches, blogs and podcasts, but his recent podcast series on humility really is worth spending time on.
His central argument is that humility in an adviser is a strength not a weakness. Many clients would love their adviser to tell them they knew what the future held and precisely the right funds they should invest their money in. And it’s all too easy in those circumstances to give them what they want.
But of course anyone who knows anything about market history, asset pricing and the lack of persistence in fund performance, realises that it doesn’t work like that.
The good news is that, in Carl’s experience as an adviser, clients find it very liberating when he tells them that financial planning involves a large amount of educated guesswork. Female clients, he says, are particularly receptive to that sort of honesty.
True, Carl admits, there are times for a financial planner to stand their ground — when, for example, markets are tumbling and the client is tempted not to stay the course. There is, he agrees, a balance to be struck. But, on the whole, it’s far better to say that you simply don’t know what’s going to happen, and to plan accordingly.
Crucially, he says, “the important thing is not the plan but the on-going process of planning.. It’s the course corrections, not the flight plan, that really matter.”
Here’s the first of three audio podcasts. You’ll find the other three on Carl’s Behaviour Gap blog and on SoundCloud:
Humility as a an adviser, Part 1