We're into the second half of the year and wow what a year it's been so far. Will the second half be a 'once in a lifetime (or say generation) experience' like the first half? We're still in the grips of this silent global virus even though it feels like we're coming through it. Let's hope that the countries experiencing spikes in daily cases can get a hold of it soon.

This year has been, and will be, a defining year for the BFA (Behavioural Financial Adviser) and don't for one minute think we've seen the last of extreme market declines. I purposefully don't use the word 'volatility' as remember the definition of volatility is the unpredictability of prices both up and down over a long-term trend line. However, the word volatility is used by mainstream financial media ONLY when the market declines. When the stock market aggressively increases (which is volatility) the mainstream media call these times the (silent times), as in it gets no attention. It's also called 'the good times'. Volatility is only used on the way down.

We have done a sterling job of keeping our clients in their seats and not blowing up their perfectly-crafted historically-appropriate investment portfolios. Our clients, through their misbehaviour, are the biggest wealth destroyers. The wolf of market timing shows up in many different forms and flavours. Think deeply about the bulk of mistakes you've seen humans make over the years with their investing and I'd bet the bulk would fall into the market timing bucket. Market timing rocks up wearing many different outfits. Get really really good at recognising the big mistake for what it is, market timing (with a story wrapped around it), when you see it, call it out, carefully.

We have to ready ourselves mentally and intellectually for the potential grenades that will be thrown into our practices by our clients as the world may become a little more 'uncertain'. We all want the best for our client families but sometimes they can't get out of their own way. As I approach 15 years in the money business I reflect on the grenades that have been thrown into my practice over the years and the circumstances where the client could not be saved from the financial darkness. There's a common theme, the grenade throwers have all been male. All the grenades I've helped other BFA's with through the great panic of 2020 have also been thrown from male hands. I mention this here because it's not talked about enough. My female clients are on average better investors and frankly more enjoyable to work with as we don't constantly revisit boring investing conversations. In conclusion, they trust my investment advice and leave the professional to it. We just focus on the financial life planning and coaching work, where all our value is added.

I'd like you to reflect on the common themes that ring out with the failed investors that you've worked with and witnessed as a real adviser working with real people. Do let me know, just hit reply.

🦺 Are You Ready For Life-Boat Drills?

The last few months have been rough, but here we are. Ready for the second half of the year. Things are starting to look up in world markets, although uncertainty is always around the corner. We never enter a period of certainty.

The temptation may be to sit back and enjoy the calm after the storm. But, now is the time to push ahead. We know that it's only a matter of time until the next perfectly expected correction is upon us. We know to expect an average annual decline of around -15%. This isn't news to us, we know it.

But some of our clients still do not understand this, and we have to take responsibility for it. During the storm, cold hard facts and statistics are useless. It was a caring adviser they needed, and luckily they had you.

The time for inconvenient truths is when the boats are docked in the harbour. Now is the time for lifeboat drills. Now is the time to prepare your clients for the next decline.

If we don't, our clients will revert to trying to time the markets. It's in their, and our, nature. Even if your clients accepted your proposition as a behavioural adviser and acknowledged that "performance" isn't a goal, his/her mind cannot store this truth any more than the body can store Vitamin C. As our (unofficial) Founding Father Nick Murray has said, the body does not retain Vitamin C. It needs to be constantly replenished.

You have to keep re-stating our beliefs and values: equities, diversification, can’t time the market, avoiding The Big Mistake, and every other thing we believe and practice.

When are you doing your drills?

🏆 Main Feature

Talk about who your client wants to be [2 minutes].

All great businesses transform people. As you know, we are not in the money business but in the people business, and if we do our work properly, transformations take place.

"Orient your communications, maybe even your services, around that aspirational image clients have for themselves. Show them how you can help them be who they want to be and they will be drawn to you like they are drawn to be that future vision. You might even help them discover who they want to be. It’s easier to be client-driven when you have driven clients."

Who are you trying to change?

📰 Articles & Blogs

Financial Markets Are No More Uncertain Today Than They Were Last Year [3 minutes]. They didn't know the future then, and they don't know the future now.

How Money Forever Changed Us [31 minutes]. A fascinating look into humanity’s greatest idea, its greatest paradox, and the story that forever changed human behavior.

Same As It Ever Was [17 minutes]. Things that never change are the most important things to pay attention to.

Want to avoid a fee face-off? Here’s how. [7 minutes]. Understanding your own value and being able to demonstrate and communicate it to clients is the key.

Do Behavioural Biases Really Matter? [5 minutes]. We can use our understanding of bad investment behaviour to ensure a successful financial future.

Confessions of a Former 'FIRE' Skeptic [5 minutes]. Even those of us who don’t plan to retire early can learn something from FIRE, and young investors with their whole lives ahead of them can learn even more.

The Bold Shakeup This Crisis Demands [8 minutes]. Take the next best step, everything is figure-out-able.

Eight Lessons I'm Still Learning [5 minutes]. Never stop learning.

🎧 Podcasts

Pivoting To A New And Better Marketing Approach After Your First Niche Misses [106 minutes]. Benjamin Brandt explains why he runs meeting surges twice a year to maximize his focus and his time off, how he has built his advisory firm to fit his lifestyle goals, and how you can bring similar flexibility to your practice.

Starting a Business While You’re Young and Not Having to Unlearn [39 minutes]. Louis van der Merwe tells the story of how most of his success has come from stumbling across great ideas and opportunities.

July 2020

🦺 Are You Ready For Life-Boat Drills?

🏆 Main Feature

📰 Articles & Blogs

🎧 Podcasts

📚 Book Recommendations

🖼️ Visuals

🍿 Videos

👏 Encore

August 2020

June 2020