2 years ago

Blue Chip Journal, Issue 77

  • Text
  • Advisor
  • Management
  • Equity
  • Finance
  • Planning
  • Advisors
  • Financial
  • Planners
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  • Offshore
  • Wealth
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Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry.

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, a ist a e tly nd ut at as lly ng rk ur at ise ey es he in, ut. as et w a nt. nt ve ed he er is ial at as ? improved by 40%. Operational costs fell, FINANCIAL SECURITY with 23% less electricity and 90% less paper used. Perpetual Guardian, a New Zealandbased financial services Are you working firm, moved to a four-day week in late 2018. Productivity improved 20% over an eight-week period; an independent survey showed staff stress The most in the levels reduced and work-life balance MESSY improved from dramatically. As you think about innovating to keep sheet dat up with constant change, don’t get stuck on technology and forget about your people. They may just end up working for a business that has found a real way to make MIDDLE? a dent in traffic congestion! References David Rock, The Neuroscience of Leadership – Improving Organisations by Understanding the Brain, Talk at FPI Convention, 2012 Morgan Housel, The advantage of being a little underemployed, www.collaborativefund. com, 17 May 2017 The balance between financial Ricardo security, Semler, The the Seven new-age Day Weekend, woo-woo and living well Delivered over Penguin Publishing, 2004 research 24 hou Robert Booth, Four-day concepts week: trial such finds as lower meaning, freedom, health, relationships, learning, what would it be? This is a question I often reflect stress and on, but increased always productivity, hobbies and www. sleep. What he is highlighting is the We manage all come up with the same answer: security., It’s boring, I know. 9 February trade-offs 2019we have to make to get the balance resources And not very original. But at its essence, McKinley that’s what Corbley, money Microsoft right Japan between Recently financial security and a means to me. For others, the word may be a Gave little their more Employees exciting a 4-day life well-lived. Week – and An investment banker Incredibly easy like “opportunity”, or “legacy”, or for Productivity Skyrocketed by 40%, www. will be happy to some money may even be a “threat”. tools, “Financial security” 8 November 2019 sacrifice sleep I discovered how unoriginal my to make more LinkedIn Talent Solutions, 2019 Global Talent Your gateway t word is when I read Khe Hy’s blog, does not necessarily money. A highschool teacher Trends Report, 2019 You’re thinking about “financial equal developed with Samantha “a McLaren, life well-lived”. How these 4 Companies security” the wrong way. Khe Hy has faced with the are Embracing Flexible work – and Why You been dubbed the “Oprah for Millennials”. At the age of 35, he gave demands of a class of teenagers may Automatically u up a lucrative career on Wall Street, resigning as Should managing Too,, director not make a huge 22 amount of money but May 2019 of BlackRock’s Hedge Fund of Funds division to figure out how is unlikely to survive without sleep. Both Full of excellen to live “a more fulfilled life”. Hy suggests are striving for a life data, fact shee that we all seek financial security in some well-lived. form or other. A spin-off from Mazlow’s Financial planners may see The their output opt hierarchy of needs. We all want at the very primary role as helping clients achieve presentations least to have enough money to survive. financial security. As we can see, each But Hy makes the point that “financial person’s interpretation of this is Fully unique. supported security” does not necessarily equal “a life well-lived”. It prompts the question, “How much money is enough?” To answer this question, Hy suggests R20k, and that the process usually involved four meetings. The potential client had experienced so much value in just one aspect of the first meeting that they were moved to ask if this was R20k per meeting – not because they didn’t want to pay the fee but because they thought given the value they had already experienced, this was a possibility. If you could capture in one word what money means to you, The value in people In a knowledge-based economy, when you are providing a professional service based on knowledge, experience, thinking and interpersonal skills, to quantify anything in terms of time – be it your employees’ working hours or the time spent with a client – is a disservice to the value that financial planners and their staff potentially can add to their clients’ lives. So the opportunity is ripe for the picking to innovate with respect to how you get and keep people and make them more productive. LinkedIn’s 2019 Global Talent Trends Report indicates that over 30% of job-seekers will turn down a job if there are not flexible work arrangements. Computer giant Dell implemented flexible work practices in 2009. US healthcare company Humana did the same in 2016, using technology to enable call-centre workers to work that from we have home. to grapple with the “messy More middle”, recently which sits Microsoft between in financial Japan experimented security (“enough”) with a and four-day a life well-lived. week for For their Hy, employees. the “messy middle” Without consists an adjustment of what he Rob Macdonald, Head of Strategic Advisory in remuneration. refers to as a lot The of the result? “new-age Productivity woo-woo”, Services at Fundhouse Money is simply a means to an end. So perhaps it is time for financial planners to acknowledge that their primary role is to help clients achieve a life well-lived. If this is the case, then much of the work that a financial planner ideally needs to do sits in the “messy middle” of their clients’ lives. Given that this is full of “new-age woo-woo”, many planners may 34

FINANCIAL SECURITY not be that excited at the prospect. Particularly given that financial planners’ training is primarily technical and focuses on helping people achieve financial security. Most financial planners are happy to ask their clients: “Tell me how much is enough, and I’ll work out how much you need.” They are also willing to offer: “I’ll put a plan together so that you can end up with enough, dead or alive.” Because the middle is messy, the average client will say: “I don’t know how much is enough.” Now what? This is where a financial planner can choose to help a client grapple with the “messy middle”. Or not. It is easier not to get involved in this part of a client’s life. As Brené Brown points out, “It’s much easier to talk about what we want and need than it is to talk about fears, feelings and scarcity (the belief that there’s not enough).” And after all, money is time. The first question a financial planner is likely to ask is: “How long will this working in the ‘messy middle’ take?” The answer of course is, “It depends.” In the latter part of the 20th century, it was okay for financial planners to avoid the “messy middle”. For the Baby Boomer generation, conditioned by parents who had endured the Great Depression and the Second World War, financial security effectively equals a life well-lived. It is no coincidence that money means security to me. Both my parents lived through these periods when there was very little financial, physical or emotional security. My mother’s father went to war when she was nine years old. He returned when she was 15. He did not even recognise her at the train station on his return home. An emotional desert had developed between them. For those born more recently, the story is different. The developed world has so much more to offer than simply survival. There is the opportunity to engage with the “new-age woo-woo” stuff because there is more security in the world. Stephen Pinker, among others, has written about how, despite the daily diet of Perhaps it is time for financial planners to acknowledge that their primary role is to help clients achieve a life well-lived. indigestible news about what is going wrong in every sector of society, the world is safer than it has ever been. And this applies despite the Covid-19 pandemic. For perspective, the Spanish Flu of 1918-20 is estimated to have killed up to 50-million people, or 2.7% of the global population at the time. At the time of writing, there are 966 000 Covid-19 deaths or 0.012% of a global population of about 7.8-billion people. Not only is the world safer, but it is evolving fast. When it comes to financial advice, I can get a Robo Advisor to work out how much I need to have enough money for financial security. I have worked with one named Eva. (They even have names.) And “she” was extremely helpful. The process was seamless and cheap. But if financial security doesn’t mean a life well-lived, then I need more help than what I can get from Eva. I need someone to help me navigate the “messy middle”. To grapple with what I want from my life. To help me make decisions on an ongoing basis. To act as a sounding board as I face transitions, big and small. But I want that person to be skilled in dealing with the “new-age woo-woo” stuff. Because if they aren’t, it is cheaper and easier for me to use Eva, and maybe see a psychologist on the side, when desperate. So, as a financial planner, the question to ponder is: are you working in the messy middle? If not, beware that Eva can’t wait to replace you, at a fraction of your fee. References: Khe Hy, “You’re thinking about financial security in the wrong way”, Heather Long , “Meet Khe Hy, the Oprah for Millenials”,, 31 December 2016 SOURCE: You’re thinking about “financial security” the wrong way - by Khe Hy, 35

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