Money, technology and you...#066
When predictions gain traction
Last week I told you about the ‘retirement’ panel I was to be on. Take a peek here. I haven’t watched it back yet but, somewhat predictably, I left the session kicking myself for things I meant to say and didn’t!
Change
It’s actually been a fortnight chock-full with financial services related events. The fascinating thread weaving these events together?
Not investments, markets, pensions or tax legislation, important as these are. The emphasis instead was on us. You. Me. We humans.
The undercurrent of change burbling away for forward looking financial planning firms excites me on your behalf.
Historically, financial advice has been about flogging products - for some it still is.
But around the noughties, the more progressive firms moved from a product sales environment to a future planning focus. Those clients fortunate enough to pick the right firm were introduced to the benefits of cashflow planning. A means to visualise how an abstract pot of money might relate to an income and life in the future.
Where are we now?
But where are we now some 20 years on?
I sat on a panel for the Chartered Investment and Securities Institute (CISI) in 2021. My prediction was:
“The financial planning firms of the future will be tech businesses that happen to do financial planning”
A year later when I became Chair of the Institute for Financial Wellbeing (IFW) I changed my prediction to:
“The financial planning firms of the future will be wellbeing businesses that happen to focus on money”.
It turns out I was right, or half right, depending on which way you look at it!
Money and you
At the Timeline Adviser 3.0 conference earlier this month Dr Daniel Crosby showed a slide which quoted:
“In the next ten years, advisers will gradually shed their role as investment managers and become more like integrated life/wealth coaches…”1
Later in the day Timeline’s charismatic founder Abraham Okusanya’s keynote speech spoke to the following slide - apologies, both photographs (header and below) are a tad skew-whiff!
The table tells how AI & technology will replace most of the investment and financial planning functions (represented by the red shading) currently carried out by advisers and planners. Financial Planners will be left to focus on the uniquely human skills of coaching, transitions and relationships (the blue shading).
Music to my ears.
This is where the real value lies for you and me. After all, “money doesn’t make decisions. You do”.2
Wellbeing and money
There are many definitions of Wellbeing but a simple definition I like is from Gallup. I wrote about it in week one of 1000Weeks. Gallup’s 2010 worldwide study found that a life of wellbeing needs a balance of:
Career and, or, purpose wellbeing.
Social wellbeing.
Community wellbeing.
Physical wellbeing.
Financial wellbeing.
I’d add to this list the wellbeing that comes from Self-Knowledge. Being conscious of how we think, the stories we tell ourselves, the narratives we buy into, the information we dwell on, our mindset. Who are we really?
But back to Gallup.
Money is merely a tool
Money is the least important of the five pillars. Of itself it cannot bring happiness. Yet its existence enables us to thrive across the wellbeing spectrum.
As Tom Morgan said at the same conference - “Money is merely a tool. It can buy time but it isn’t time. It’s what we can swap it for”.
The question the best Financial Planners are now asking their clients, or helping them answer is:
“What for you is a life well lived?”
And then guiding them to get there by making referrals to the relevant subject matter experts - Career and Transition Coaches, Travel Consultants, Therapists, Doctors, Personal Trainers etc. All in addition to the more traditional referrals to solicitors, accountants and insurance brokers.
This is powerful. It’s not woo.
Its about connecting money to wellbeing and meaning. Helping people make positive choices to live a life that’s true to them.
You
As ever, I’m interested in you.
On a scale of 1 to 10, with 1 being, ‘I think they should steer well clear’ to 10 being ‘fantastic, it’s what they should do’:
What do you think about financial planners taking on a more life coaching role?
And, on a scale of 1 to 10, with 1 being ‘In need of attention’ to 10 being ‘100%’
How would you assess yourself against the five pillars of wellbeing?
Pour yourself a herbal tea (or caffeine shot of choice) and tell me your number(s), or drop me a comment. I’d love to hear from you.
Finally, you’re never going to be any younger than you are today. Where in life are you saying “When I get to X, or achieve Y, I’ll be happy?”. Apparently this is known as Destination Addiction. Don’t fall for it!
Until next week my friends,
Ruth
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McKinsey & Company, "On the Cusp of Change: North American Wealth Management in 2030," January 3, 2020. Seems they had an inkling of this before me! '😘
A cracking line from fellow Financial Planner and presenter at Adviser 3.0 Karen Ritchie