David J. Murphy

“Fast is fine, but accuracy is everything.”—Wyatt Earp

“It is a fine thing to be honest, but it is also very important to be right.”—Winston Churchill

While reading in the Old Testament book of Exodus, my attention was riveted by the simple word, “fine.” For context, Moses successfully led the people of Israel out of Egypt, and they began their forty-year wanderings in the wilderness.

In Exodus 16, after one and a half months in the wilderness, the hungry, tired, and worn-out people of Israel began grumbling against their leaders: Moses, and Aaron. If you know this story, you are aware that God heard their complaints and began providing sporting fowl (quail) each evening, and something called “manna” each morning.

For us living 3400 years later it is hard to know what manna was like. Even back then it was a bit of a puzzle. “When the people of Israel saw it, they said to one another, ‘What is it?’ For they did not know what it was.”¹

We read this description of manna: “In the morning, dew lay around the camp. And when the dew had gone up, there was on the face of the wilderness a fine, flake-like thing, fine as frost on the ground.”²

There it is. “Fine.” Repeated twice. The Hebrew word translated “fine” is Daq. It means a “very little thing, small, thin.”

Point: On occasion we benefit from taking a commonly used word and examining its application to our business practices, our personal character, and to the impact that we are having on others.

Financially Fine
How do we as independent financial professionals (IFPs) use the word “fine?”

I consulted a dictionary to learn the various meanings of the word. It is polysemous. (Like “run” or “bank” it has several meanings). Consider some of these various definitions of the word “fine:”³

• All right, well, or healthy: not sick or injured
• Superior in kind, quality, or appearance: excellent
• Very small, very thin in gauge or texture
• Very precise or accurate
• Delicate, subtle, or sensitive in quality, perception, or discrimination

Let’s ask ourselves three very fine questions:

1. Can we categorically state that our clients are doing fine? (All right, well, or healthy.)
2. Can we describe the planning that we do, and the products that we recommend, as being fine? (Superior in kind, quality: excellent.)
3. Do our clients experience the attention we pay them as being fine? (Very precise, detailed, accurate, discriminating, perceptive, of high quality.)

“We’re Fine”
As an IFP, you want to know how your clients are doing. At. All. Times. But how?
Here are several ideas:

• Talk to them. With current technology, it is even easier to talk with our clients because we have countless ways to connect to one another. When we talk with a client, we should not be afraid to get a little bit personal. Fine means healthy, and that extends beyond just financial wellbeing.
• Follow your clients across all social media platforms. You will discover that they are eager to post important events, milestones, celebrations, new purchases, and sometimes–they grow silent. That is when you really need to check in on them.
• Remind yourself of their goals, dreams, and objectives and keep these same ideas in front of them. By doing so you become known as someone who is worth doing business with.

Point: Frequent, intentional, client-centered contact is the only way to know if your clients are fine.

“These Are Fine!”
An IFP delivers excellent service and products when the clients’ expectations are met or exceeded. How do we know when we have met that test?

• Customer retention will tell us. If we are a fee-based practice, are our clients willing to continue to meet with us and pay the fees?
• Repeat business is key to knowing that we enjoy continued trust.
• Measure the clients’ enthusiasm with surveys.
• Take client complaints seriously.
• Measure client satisfaction by percentage of new clients earned through referrals.
• Track the number of attorney, accountant, and insurance professionals you get introduced to by satisfied clients.

Point: It is easy to delude ourselves that we are providing fine, excellent service and products. Our beliefs need verification.

“Fine Work!”
Nobody likes to have someone else look over their shoulder. Being inspected or audited is uncomfortable. The regulatory environment in which IFPs operate demands that we invite scrutiny. We need to know that our recommendations and financial reviews are both precise and accurate. Like scientists.

“Precision and accuracy are two ways that scientists think about error. Accuracy refers to how close a measurement is to the true or accepted value. Precision refers to how close measurements of the same item are to each other. Precision is independent of accuracy. That means it is possible to be very precise but not very accurate, and it is also possible to be accurate without being precise. The best quality scientific observations are both accurate and precise.”⁴

Think of the game of darts. The goal is to hit the bulls-eye (center) of a dartboard.

• The closer that the dart lands to the bulls-eye, the more accurate the throw is.
• If you throw two darts and they are neither close to the bulls-eye, nor close to each other, your throws are neither accurate, nor precise.
• If all of the darts you throw hit the board very close together, but far from the bulls-eye, there is precision, but not accuracy.
• If you throw four darts and all four land an equal distance from the bulls-eye, your throws are accurate, but not precise
• If the darts that you throw land close to the bulls-eye and close together, there is both accuracy and precision.

Point: Your service and the products that you recommend must be both precise and accurate. Your clients’ goals and objectives are the bulls-eye. Helping them reach their goals is the way to measure precision. Their risk tolerance, budget, and willingness to accept loss are each to be considered as a measure of accuracy.

Summary
When I checked where else in the Old Testament the Hebrew word Daq, translated “fine,” might appear, I was surprised and delighted with what I found.

In the book of 1 Kings, chapter 19, we find the prophet of God, Elijah, fleeing for his life. (He discovered that it is dangerous to criticize the King and Queen). He hid in a cave. God said to him, “What are you doing here, Elijah?”⁴ Then, “Go out and stand on the mount before the Lord.” And behold, the Lord passed by. Theophany can be startling because it is not what we would expect.

• First, a great and strong wind tore the mountains and broke in pieces the rocks before the Lord, but the Lord was not in the wind.
• Second, an earthquake shook the ground, but the Lord was not in the earthquake.
• Third, fire blazed in scorching heat and flame, but the Lord was not in the fire.

No, after the strong winds, earthquake, and fire, there came the sound of a low whisper. (Literally, a fine silence.) God showed His presence in near silence. As the story unfolds, however, fine Divine silence does not mean Divine inactivity.

As an IFP you need to keep the idea of fine silence, quiet presence in mind.

• You are not required to be wildly entertaining, come across as brilliant, become pesky, or force your opinions on your clients. Let your presence be fine.
• Your products do not have to be heralded as the best, the cheapest, the highest performing, the leading one of its kind, etc. You are aiming for fine.
• You do not have to have all the answers. There’s a big difference between demonstrating your abilities and acting like a know-it-all. Your mastery of the concepts already exceeds those of the client and is likely just fine.
• Don’t try to impress through technical speech. Unless you’re absolutely sure the client understands the meaning of an acronym or what a buzzword means, stick to simpler terms. Don’t use words in your written communication (emails, planning documents, and text messages) that you wouldn’t use during verbal communication (in person or on the phone). People find plain vocabulary to be just fine.
• Bite your tongue. No client relationship is perfect, and disagreements with clients are bound to occur. Rather than responding angrily or defensively to a client who is being rude, take a step back, show self-restraint, breathe, and stay away from offensive statements—even if they’re warranted. Loud vocal volume or intensity is never fine.

“Drawing on my fine command of the English language, I said nothing.”—Robert Benchley

If you are already exemplifying all of the above, I believe you are already a fine IFP!

Footnotes:

1. Exodus 12:15, The Holy Bible, English Standard Version. ESV® Text Edition: 2016. Copyright © 2001 by Crossway Bibles, a publishing ministry of Good News Publishers.
2. Ibid, Exodus 16:13-14.
3. https://www.merriam-webster.com/dictionary/fine.
4. https://manoa.hawaii.edu/exploringourfluidearth/physical/world-ocean/map-distortion/practices-science-precision-vs-accuracy.
5. 1 Kings 19:9, The Holy Bible, English Standard Version. ESV® Text Edition: 2016. Copyright © 2001 by Crossway Bibles, a publishing ministry of Good News Publishers.
6. Ibid, 1 Kings 19:11.

When I was 11 years old, I inherited two things from a 14-year-old neighbor kid named Bill:

1. A parakeet named Clancy
2. A newspaper route

Bill asked me to take over his bird and his route because he and his family were moving away. I never cared much for Bill. My friends and I called him “Pigeon-toed Monkey Vomit.” He was a scholarly type, wore glasses, and was an only child. (I regret not being more kind to him.)

Clancy seemed lonely and led to the acquisition of a second parakeet. They pretty much hated each other. Neither of them lived more than a few years under my care.

The paper route, on the other hand, set me up pretty well financially. I had 80 customers spread across two sprawling neighborhoods divided from one another by a highway named Winola Road.

The Scranton Tribune was the morning newspaper I delivered to these houses. It cost $1.10 per week back then. When it came time to collect the payments, I walked the same route, but instead of it being 5:00 AM when I started out each morning delivering papers, I showed up at dinner time when I knew most people would be home.

Many, if not all, customers tipped me. That was how I earned money. Rather than give me a dollar and look around for a dime, many customers just gave me two one-dollar bills.

At the end of my second year, at age 12, I had $2,500 in my personal account at First Federal Savings. Being twelve, I walked into their building one afternoon and demanded to see all my money, in cash (specifically in $20 bills, stacked five to a pile, and in 25 piles) on the counter. The first teller balked. And a second. Then finally someone with some clout stepped up and met my demands.

All of this seems other worldly, like part of a story that only exists in history books or fiction. Consider these anomalies from life as we know it today:

• Daily print newspaper, delivered by a young person walking alone in the predawn hours
• Six editions of a daily newspaper delivered to the door for only $1.10 per week
• Cash only transactions
• People exchanging dimes
• Commonplace savings and loan institutions
• Face-to-face banking

Point: Like all things, financial behaviors, commerce, and money matters inevitably, and unpredictably, change over time.

Uprooted
A colleague of mine is planning to purchase rural space in order to create a study center where individuals can reconnect to nature, the land, and to the significance of farming in human life. He describes people as being “deracinated.” This adjective is defined as “uprooted” from one’s natural world, home, culture, or similar environment. “Uprooted” means to be ripped out of place.

In a certain sense, if we live long enough, we are all deracinated from the way things used to be. (Think of my paper route example.)

I am acquainted with many people serving Ukrainian refugees who are dispersed throughout Eastern and Western Europe.

One such person, Donna, is caring for these dear souls currently living in Croatia. I enjoy receiving her newsletters. She empathizes with the refugees, saying of herself (and all of us) “We are all living in exile, trying to find meaning in a place other than home yet longing to return.”

Donna writes: “Exile is when you live in one land, and dream of another. It gives a discomforting disconnect between our memories and our fundamental sense of who we are and the reality of a new identity we have to construct.”

Independent Financial Professionals (IFPs) Serve the Uprooted
Anna Helhoski wrote an article for the web site Nerdwallet, published Mar 7, 2023, and entitled Pandemic at 3 Years: How Our Financial Lives Have Changed.¹ Consider her observations:

• By August 2021, an estimated 2.4 million workers had retired early or unexpectedly since the pandemic began, according to research from the Federal Reserve Bank of St. Louis.
• Retirement didn’t last long for some. Among those who retired during the pandemic, 27 percent of people returned to work because they simply needed a bigger nest egg to get them through their golden years, according to a report from Joblist, an employment listings and research site; 21 percent said they specifically returned to the workforce in response to inflation and the rising cost of goods.
• Inflation peaked at 9.1 percent in June 2022—the highest rate in 40 years, according to Bureau of Labor Statistics data.
• The car market turned upside down. Supply chain problems caused new car production to plummet, pushing more car shoppers to buy used vehicles.
• The Fed raised the funds rate a whopping seven times in 2022.
• We changed the way we bought homes. As quarantines lifted and interest rates fell, investors and new buyers made big moves, even snapping up properties sight unseen. Many homeowners opted to refinance to historically low rates instead of putting their homes on the market. Competition for limited inventory heated up, and bidding wars, waived contingencies and cash offers became commonplace.
• While stuck at home, consumers weren’t spending the way they used to, and those who qualified received an infusion of cash via government stimulus checks. Those factors, combined with higher wage growth, led to historic levels of personal savings. Households accumulated $2.3 trillion in savings from 2020 through summer 2021, Federal Reserve data show.
• Rates on savings accounts and CDs skyrocketed. The inflation partly caused by pandemic-related supply chain disruptions led the Federal Reserve to increase its federal funds rate multiple times. Banks and credit unions took their cue to raise rates.
• Small businesses got a hand. From April 2020 to May 2021, over 11 million Paycheck Protection Program loans were issued to provide small businesses with emergency financial assistance, according to an October 2022 analysis of Small Business Administration data by NPR.

The financial lives of our clients no longer look like they did just a few years ago. Compared to when an independent financial professional (IFP) and a client historically met for the first time, almost nothing is what it was back then. Clients have literally been ripped out of place, uprooted, in terms of the physical location where they once worked, lived, traveled to, invested, bought cars, dined, or shopped.

In addition, if in a subtle way, people are even uprooted in how they view money. Today’s digital world influences how clients make financial decisions.

The increased use of electronic payments is changing how clients value money. The more removed they become from their money, the less they may think about how much they’re spending and saving.

Point: The IFP serves a clientele that, to a remarkable extent, works, spends, saves, and invests very differently than just a few years ago. They are financially deracinated.

Welcome the Antonym
For every word there are useful synonyms, other words that have the same, or similar meanings. Example: “Extirpated” is very similar to uprooted and deracinated.

On the other hand, for every word there are multiple words carrying the opposite meaning. These antonyms are the essence of how best to combat the impact of the word they oppose.

Here are some antonyms that are shared between “uproot” and “deracinate:”

• Build, create, establish
• Put in, help
• Ratify, remain, leave alone
• Welcome, plant, sow

IFPs Help Clients to Build, Create, Establish
Change is often unnoticeable. We roll into disruptions slowly, and pay little attention to what is different.

Post Pandemic there are many things that IFPs can help their clients to build or rebuild, including:

• Build a realistic post-pandemic, forward-looking budget. Cost of goods and services has changed. Incomes and interest rates have changed.
• Rebuild emergency savings. During the Pandemic many clients spent their emergency funds when their employment changed, they bought new houses because they were suddenly working from home, or they needed to find things to do outside (RVs, boats, ATVs, etc.).
• Re-start any savings goals that were paused, such as retirement or college savings.
• The old trends, frameworks, and financial objectives may no longer be applicable. An IFP can help clients create a renewed financial plan.

IFPs Can Put in, Help
IFPs are equipped to help clients take recovery one step at a time. The IFP can put the client in the right frame of mind. Oftentimes, the client has simply lost perspective. We know that primary-aged children experienced educational setbacks during the Pandemic. Similarly, small businesses, families, and individuals experienced financial setbacks. Fresh perspectives are required in order to:

• Reacclimate to higher interest rates.
• Properly assess the volatile stock market.
• Grasp the impact of gyrating real estate prices.

IFPs Can Ratify, Remain, Leave Alone
Whenever a person survives an upheaval, a perilous moment, or disruption, they emerge wondering what is the same, what needs to receive attention, and what can be left as is. Consider the clients who are wondering if:

• They still need the disability policies they own.
• The life insurance coverage they have still meets the need.
• The Last Will and Testament is up to date.
• The named gardians for the children are still the right choice.

By sitting down with a seasoned IFP, they can receive reassurance, ratification, and confidence that the insurance owned is still the right coverage, the beneficiaries are still the correct designation, and that executors and guardians remain the proper selection.

Professional IFPs Welcome, Plant, Sow
Spring follows Winter. Bare fields are again resown with fresh seeds in order to grow another crop. On the other hand, for sustainable farming, crops must be varied and rotated.

Clients often need to have their hands held if they are going to make fresh starts, major changes, or significant goal adjustments. The IFP can welcome the clients to new ways of seeing their lives in the context of their financial circumstances. For instance:

• After a period of no vacations or travel, and no eating out, many clients overspent in the period since the Pandemic in an attempt to make up for lost time. They need to contain the urge to splurge for that exact reason and get back to living and spending like they were prior to the Pandemic. They need to sow new spending habits. They need to rotate from spending to saving.
• IFPS can welcome clients back to the financial wisdom of thinking long term, spending less than they earn, and keeping an emergency fund.

Summary
The financial lives of our clients no longer look like they did just a few years ago. As an IFP you serve a clientele that, to a remarkable extent, works, spends, saves, and invests very differently than just a few years ago. These clients are financially deracinated.

The antidote is the antonym.

Thinking back to Donna working with Ukrainian refugees living now in Croatia. To combat the feelings of displacement, and uprootedness, Donna led the children in a new direction: “In Croatia, we have delightful times offering craft projects and playing with outside summer toys. For a group that has known deep trauma, toys such as frisbees, beach balls, bubbles, and water squirt guns brought great joy, and physical exercise.”

In their financial lives many clients have never experienced the rapid changes of the last several years. There is a whole spectrum of actions that the IFP can urge their clients to take, and the IFP can be creative. While some clients may face some very hard choices, the experienced IFP is equipped with the skills to combat the feelings of uprootedness.

“One can remain more sure-footed by taking small steps, but perhaps achieve greater speed by taking bigger steps. Of course, one also runs the risk of setting out in a completely erroneous direction. Surely the important thing isn’t the length of our steps, but that the objective is clear.” —Angela Merkel

The seasoned IFP can help clients regain their footing and reorient themselves to the proper objectives. All it takes is a handful of antonyms.

Footnotes:
1. https://www.nerdwallet.com/article/finance/what-did-the-pandemic-change.

Many years ago, when I first started selling life insurance, I often found myself with hours of unassigned time on late weekday afternoons. I frequently spent the time in the public library reading. (I was a little lazy in the beginning of my career.) It did not take long before my new bride, herself a hardworking first grade teacher with as many as 30 kids in her class, began innocently asking, “How was your day?”

Soon, just anticipating her question caused me to step up my game and make better, more productive use of my time. There was power in her ability to influence my behavior. Since those early days, my wife has helped me grow in innumerable ways and is responsible for my maturing in every direction possible. (She’s nowhere near done, however!)

“Anyone who thinks that they are too small to make a difference has never tried to fall asleep with a mosquito in the room.”—Christine Todd Whitman

Point: We can have an effect on other people in ways that exceed our comprehension.

Self Motivation
In his comprehensive overview of moral philosophy, The Theory of Moral Sentiments (1759), Adam Smith introduced the concept of the “impartial spectator”—an imagined third party who allows an individual to objectively judge the ethical status of his or her actions. Smith believed that we judge ourselves only by imagining what an impartial spectator would approve or disapprove of in our conduct. Underlying this idea is the fact that we have a natural desire to be loved and we dread receiving blame.

Whenever I endeavor to examine my own conduct…I divide myself as it were into two persons: and that I, the examiner and judge, represent a different character from that other I, the person whose conduct is examined into and judged of. The first is the spectator…The second is the agent… (TMS III. 1.6)

Once we grasp the idea of an indwelling impartial spectator, believing that we are capable of judging ourselves, we construct a new delineation between being praised and being praiseworthy, being blamed and being blameworthy.

There are many limitations of this notion, but primary among these is the fact that such a system, if it existed, can only be applied retrospectively. It is unwieldy and not useful for making prospective decisions.

Point: As human beings, we have a conscience, we are aware of social mores and norms, and we have a sense of what is best, or just good, as well as what is unconscionable, or just out of bounds. Nevertheless, we need others to keep us accountable.

Time to Realize the Power
An independent financial professional (IFP) has an impact on a person or family or business whether or not he or she writes any insurance, invests any funds, or earns any fees. In fact, an IFP can have incredible impact on client behavior without actually meeting regularly or in person.

According to Investopedia, “Advisors’ real value lies in managing client behavior. Their mission is to keep their clients focused on their goals, even as their short-term objectives may change.”¹

On the Web Site for Michael Kitces, guest post writer Derek Tharp wrote the following: “The unique power of the human-to-human connection means clients can achieve better behavior, change outcomes, with a financial advisor than they may be able to achieve by themselves or through the use of technological tools. Because when a human is involved, we often have few options for totally avoiding the unfavorable perceptions we think others may have about us if we don’t follow through on our goals…which can be highly motivating. In the case of technology, while it may provide useful behavior change reminders…we can always just turn off the technology and feel very little guilt. But it’s far harder to just ‘turn off’ an existing relationship with another person.”²

This is noteworthy. The iPhone in the client’s hand is capable of doing innumerable things to help clients to better organize, maximize, multiply, and research nearly everything. Yet, an IFP has even more power!

“How wonderful it is that nobody need wait a single moment before starting to improve the world.”—Anne Frank

At the outset of the COVID-19 Pandemic, Harvard Business Review published an article addressing the changes that remote work would likely have on productivity. The article stressed the importance of human-to-human contact.

“Social psychologists have known for decades that people are motivated to work harder when others are watching. When they are observed, people run faster, are more creative, and think harder about problems. These effects occur for several reasons. For one, people want to impress others through their performance, and thus try harder. Anyone who has ever stayed in the office late when their boss was still around experienced this phenomenon.”³

When a client engages the services of an IFP, it is with the intention of upgrading every aspect of a financial life. Intuitively, clients know that a certain degree of accountability is necessary in order to achieve desired outcomes. They expect this accountability to come from personal interactions.

If the presence of an IFP has a fundamental effect on clients and what they do or how they behave, it also impacts how they think about their actions. Somehow, what a client does or doesn’t do magnifies in importance just because an IFP is liable to ask questions in their next meeting.

“When others are watching, people include others’ perspective into their own perspective. The dual perspective then magnifies their work, because investing time, energy, and effort into something that feels big and meaningful is much more motivating than investing in something that feels small. The magnification of one’s work increases one’s motivation to work more and harder.

People magnify what they do not only when they are observed, but even when they merely feel observed.”4 (Author’s emphasis)

A Brief Physics Lesson
We should not be surprised by any of this because this is how the world works.

In physics, there is something called “The Observer Effect.” A disturbance takes place when someone observes a closed system simply by the act of observation.

“This is often the result of utilizing instruments that, by necessity, alter the state of what they measure in some manner. A common example is checking the pressure in an automobile tire, which causes some of the air to escape, thereby changing the pressure to observe it.”5

“The Observer Effect is the fact that observing a situation or phenomenon necessarily changes it.”⁶

Point: Scientists make extreme efforts to eliminate the impact of their own presence on whatever they are studying. Human beings give off heat, radiation, air movement, carbon dioxide, bacterial contaminants, oils, moisture, and other factors that impact measured outcomes. Our scientific equipment similarly contaminates the objects under study.

The Hawthorne Effect
One subset of The Observer Effect, related to the study of human behavior, is The Hawthorne Effect. Many decades ago, a study was conducted at a factory named Hawthorne Works. The study analyzed the change in human behavior, especially productivity, by changing the amount of light at the Hawthorne Works and measuring its impact on working practices. Greater lighting led to temporary increases in production. Why? Greater lighting made everything and everyone more visible.

Applications of lessons drawn from The Hawthorne Effect are incorporated into many activities aimed at influencing the behavior of innumerable, randomly selected people whose actions occur simultaneously, or consecutively.

One such application is called the “Red-Light Camera Program.”

“In a Red-Light Camera Program, a camera is installed in a location where it can take photos or video of vehicles as they pass through an intersection. City employees or private contractors then review the photos. If a vehicle is in the intersection when the light is red, then a ticket is sent to the person who registered the vehicle.”⁷

The idea behind these programs is to reduce cross-street collisions. Theoretically, drivers should fear the possibility that they will be fined and will therefore be more likely to stop at the light, consequently lowering the number of accidents. And in fact, evidence clearly shows that Red-Light Camera Programs are effective at decreasing the number of vehicles running red lights.

Independent Financial Professionals and The Observer Effect
“You may find that making a difference for others makes the biggest difference in you.”
—Brian Williams

IFPs provide human-to-human accountability, a key value-add that will be hard for computers and AI to ever mimic.

“When a human is involved, we often have few options for totally avoiding the unfavorable perceptions we think others may have about us if we don’t follow through on our goals.”8

Application of The Observer Effect for IFPs

1. When an IFP assigns expectations of a client, ones that are SMART (Specific, Measurable, Attainable, Relevant, and Time-based) the client can expect to later account for the results. This will change the trajectory of the client’s behavior.
2. An IFP can consistently remind clients that each goal aligns with what the clients want to accomplish. Failure of the clients to follow through on their responsibilities will cause them to not achieve what is important to them.
3. An IFP can help clients wisely assess their behavioral motivations by evaluating the ways in which the clients’ various social groups that they belong to influence their spending, savings, and investing habits—positively or negatively.

Practical Ideas:

• Record and send a video of you asking the clients to remember their goals and to inquire as to what the clients have been doing.
• Set up an online group with multiple clients to exchange their progress on their goals and to keep each other accountable.
• Take pictures of your client meetings and share the photos with clients from time-to-time, to add the element of human observation.
• Make a growth chart for clients of their goals that they want to improve on and ask them to share their progress.
• Send a Post-It note with the word “Done” on it and attach it to a copy of the client’s financial goals or milestones that have been achieved.

Summary
“What you do for yourself dies with you when you leave this world, what you do for others lives on forever.”—Ken Robinson

The role of an IFP provides fantastic opportunities to demonstrate patience, humility, and some humanity. It also is a privileged position with the power to change human behavior.

The power is more potential than kinetic. To be unleashed, the power to modify the behaviors of clients must follow the normal activities of a professional advisor:

• Preparation: Do the work beforehand. Conduct a thorough client analysis before each meeting, do the research, get a list of questions together before the appointment.
• Client Meetings: Demonstrate care and respect for people’s time through prepared agendas, keeping the meeting on track, and ensuring action steps with responsible parties.
• When Real Life Strikes: When a client faces a difficult personal situation (illness, child/elder care), respond quickly, stay appropriately in touch, follow-up with sensitivity.

By acting in this fashion, an IFP can be far greater than Smith’s “impartial spectator.” Indeed, the IFP can exercise astounding power to affect the clients’ behavior. The clients need this. Even if they are patently unaware of their need.

“I’ve learned that you shouldn’t go through life with a catcher’s mitt on both hands. You need to be able to throw something back.”—Maya Angelou

Here’s encouraging you to Pitch with Power!

Footnotes:

1. Investopedia https://www.investopedia.com › ho…How Understanding Client Behavior Helps Financial Advisors.
2. https://www.kitces.com/blog/how-financial-advisor-human-connection-positive-behavior-change-accountability-partner/.
3. https://hbr.org/2020/05/we-work-harder-when-we-know-someones-watching.
4. Ibid.
5. The Observer Effect | IEEE Conference Publication – IEEE Xplore.
6. Hawthorne effect – Catalog of Bias.
7. Red Light Cameras May Not Make Streets Safer – Scientific American.
8. https://www.kitces.com/blog/how-financial-advisor-human-connection-positive-behavior-change-accountability-partner/.

Sitting across from me on a veranda at an African College was a young woman in her second year at the university. She has a warm smile and a slightly shy aura. Her English is good, and her accent is understandable. (A plus because my hearing is not great.) I will call her “Missy.” Missy has a hard story to relate and only after I ask several strategic questions are we finally getting to truly important matters.

Missy has two older sisters. They are seven and five years older than her respectively. Both are married and live in different villages. Early in their marriages both invited her to stay with them. On different occasions, and when her sisters were out of the houses, both of her brothers-in-law individually raped Missy. Horrific experiences. Blood boilingly awful. To add insult to injury, Missy’s sisters deny that these incidents ever even happened. “My husband would never…”

All of this is told through tears, but with strength that inspires.

Missy’s underlying question is, “How can I move forward in life?”

My answer: “First, identify what is impossible.”

Arthur Conan Doyle’s character, Sherlock Holmes, said, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”

This approach is invaluable to solving mysteries, but also has application in many directions, including dysfunction within families (and as we will see, in financial services).

Missy faces a dilemma:

• Either she can grow bitter, bear resentments, and nurture hate toward her attackers and her sisters; or,
• She can forgive her attackers to their faces and forgive her sisters to their faces for denying what happened.

I ask, “Missy, we cannot change the past, so what do you want in your future?”

“I desire to have my family around me and do not want to see it all broken apart.”

I tell her that choice number one—sitting in bitterness, unforgiveness, and hate—will make her dream impossible. Alternatively, extending grace (unmerited) and forgiveness (undeserved) is the path forward to achieve her desires. (This option is unnatural and may require God’s help.)

Point: When faced with hard issues, challenges, and difficulties, the way forward begins with discovering, then eliminating, the impossible.

Financially Impossible
The United States is $34 trillion in debt. Getting out of debt seems to me to be undeniably impossible. But I digress.

As an independent financial professional (IFP), you meet innumerable people whose financial situations appear extremely bleak. In order to give them practical, executable action steps, you must first eliminate the impossible.

Case Study #1:
You get introduced to Darrin, age 45. He is an extroverted guy with a nervous demeanor. His wife Susan, age 46, is the friend of one of your clients and, having heard of the good work you did for her friend, contacted you requesting your assistance with her own family’s finances.

You look around. Nice four-bedroom house on a broad wooded property. Two late model cars on the circular driveway. “Must be doing pretty well,” you think to yourself.

You ask an opening question: “Who has been your financial advisor?”

“We have never used one,” says Susan. “Neither wanted nor needed one,” says Darrin. (Yellow caution flag.)

“Of the financial institutions you have worked with, which has been your favorite?”

Susan looks at Darrin, who says, “I really don’t trust any of them.”

“Exactly how have they disappointed you?”

“Too many restrictions,” says Darrin. (Yellow caution flag.)

You decide to switch tactics. “Tell me about your financial goals.”

Susan: “We want to retire while we are still young to a state with a warmer climate and near beautiful water where we can attract visits from our grandchildren!”

Darrin: “Retirement. That will be the day.” (Big red flag.)

After asking Darrin a series of questions designed to peel back the layers, you and Susan are simultaneously introduced to three pieces of bleak news:

• Darrin has nothing saved for retirement.
• Darrin has been a compulsive gambler. In fact, he cashed in their CDs before the end of their terms and gambled away those monies. He borrowed funds from his 401k by finagling his answers to the questions as to the use he intended to make of them.
• He took lines of credit against the house over and above the mortgage.

The Impossible: Retiring at a younger age and purchasing a beachfront condo.

The probable: While most IFPs recommend that young people save 10 percent to 15 percent of their incomes toward retirement, they also know that people in their 40s earn 60 percent more than they did in their 20s. People in their 40s and even 50s who are not on track can often catch up by saving a larger percentage of their income. Because Darrin earns a strong income, and the combined total loan payments are less than 30 percent of his income, there is a strong possibility that Darrin and Susan can get on track to retire in Darrin’s mid-to-late sixties and be able to afford a place, while maybe not on the beach, perhaps four blocks from the beach. Regaining financial footing will require the following:

• Counseling for Darrin’s gambling addiction.
• Great accountability.
• Transparency.
• Susan acting as a co-signer on all accounts.
• Significantly increasing the savings from each month’s income.

Unsurprisingly, forgiveness and grace will also be required!

Case Study #2:
You were recently introduced to Pickleball. You had no idea how popular the game had become until you heard so many people talking about it. At the invitation of a neighbor, you tried it out. And loved it! Your enthusiasm led you to join a kind of league. Now you meet innumerable people who are like-minded and have equivalent skills.

One such pickleball fanatic is Robert. At age 42 he seems no older than…age 62. He is not in Olympic shape, let’s leave it at that. As a successful IFP you know when to begin asking probing questions.

“Tell me about your family,” you say.

“Well, which one?” he responds. Letting you absorb this in a moment of awkward silence, Robert says, “You see, Debbie and I raised two children, and they are on their own, married, and beginning their families. They are fully fledged!”

You mean it when you say it, “That is great news! Congratulations!”

Robert continues. “Then, the unexpected happened. We met a young woman desiring to end the pregnancy in which she was carrying twins. We urged her not to go through with the abortion she was contemplating. She agreed upon one condition. Debbie and I would have to adopt, and raise, her twins.”

“Ufda,” you say. (Your deceased Norwegian parent still impacts your life!)

“Well, we are delighted, actually, and we feel like we have brand new purpose,” says Robert.

“If you don’t mind me asking,” you hesitantly begin, “How has this impacted your financial lives, like retirement goals?”

“Most of it went out the window!” Robert does not look unhappy. “I will be 60 when the twins graduate from high school and start college.”

“Well, I already used up my Ufda.” Then you venture into the wild unknown, the land of no return. “Do you still own life insurance?”

Now Robert looks serious. “You know, I don’t. We had buckets of term life insurance that we let lapse when our kids were launched. I guess I should consider this. Do you sell life insurance?”

“Sorry, no,” you lie. “I mean, I secure life insurance for clients that need/want it, but I am not a salesman per se.”

“Gotcha,” replies Robert.

You and Robert meet again later, this time not on the Pickleball court. You discover that in addition to carrying a few extra pounds, Robert has Type 2 Diabetes. And, he has a family history of heart disease.

You secure some quotes for 20-year term from a few leading carriers. The rates are something like ten times what he paid prior to dropping his long-held policies.

“These premiums are a bit off-putting,” you observe. “Tell me. Would you have agreed to adopt the twins if you didn’t think you could provide for them?”

Robert looks intrigued. “Of course not.”

Taking a deep breath you ask, “Then you are committed to doing so, even if you die prematurely?”

Robert nods. “It would be impossible to do so unless I owned sufficient life insurance, wouldn’t it?”

“Yes,” you say, and then, “It’s the impossible we want to eliminate first. Now that we have done away with the impossible, we can investigate what’s possible.”

Point: Most family and individual financial crises are partial failures, not complete; financial stress usually involves temporary setbacks and not permanent. This is the basis of something being probable, and not impossible.

Financial A Fortiori
In philosophy, there is something called an a fortiori argument. It is defined like this: “If something less likely is true, then something more likely will probably be true as well.”¹

Example: “Jesus used an a fortiori argument when He said, ‘If you, then, though you are evil, know how to give good gifts to your children, how much more will your Father in heaven give good gifts to those who ask Him!” (Matthew 7:11) Jesus’ point hinges on the phrase how much more.”²

As an IFP you encounter potential clients who cling to an idea even if it is indubitably false. One such idea is the amount of life insurance that someone should own in order to be a prudent provider for his or her family.

Case Study #3:
A successful female executive says, “I think about $500,000 is the right amount of life insurance given our circumstances.”

Facts:

• She makes $112,000 per year.
• She has a husband who is on disability from the Police Department. He gets a minor monthly stipend. He is on a prescription for a neurological treatment that costs in excess of $1,200 per month out of pocket.
• There are two children aged 13 and 10. They are each in the “Fast Track” program at their schools. They expect to go to college.
• The kids’ combined private school tuition (partially subsidized by the school in honor of her husband) is still $1,200 per month.
• The monthly mortgage payment is $1,150 and the outstanding loan balance is $395,000.
• Total household monthly budget for basic expenses is slightly less than $6,000.
• They have $28,000 in their savings.

As an IFP you could make an a fortiori argument along these lines:

“If you died without life insurance your family’s savings of $28,000 would be used up in less than six months. Where would that leave them? On the other hand, if you died owning $500,000 of life insurance, your family’s expenses would be covered for less than seven years. If leaving them destitute after five months is unacceptable, how much more acceptable is leaving them destitute after seven years?”

The a fortiori argument in this case is, “If it places your family in an impossible situation in only five months without life insurance, is delaying an impossible financial situation by seven years more acceptable?”

There is a stronger use of a fortiori argument. “If you believe that $500,000 is ample, and your family could struggle by, then how much better would it be for them if they had $1,000,000?”

Point: In financial services we benefit our clients when we first identify, and eliminate, what is impossible, and second, by using a fortiori arguments, helping them see what can be possible, even probable, and in fact, preferable.

Summary
An IFP’s responsibility is to root out the impossible and to make plain the probable. In essence, as an IFP, to best help your potential clients who are currently in financial crisis, “Identify what is impossible.” Then eliminate that.

Next, employ the very useful skill called a fortiori argument in order to persuade clients regarding what is truly possible.

“The ancient Romans utilized argumentum a fortiori, ‘argument from strength.’ Its logic goes like this: If something works the hard way, it’s more likely to work the easy way. Advertisers favor the argument from strength. Years ago, Life cereal ran an ad with little Mikey the fussy eater. His two older brothers tested the cereal on him, figuring that if Mikey liked it, anybody would. And he liked it! An argumentum a fortiori cereal ad.”³

Much of the procrastination that occurs in families putting off financial planning decisions stems from the fact that the waters are murky. There are currents of impossibility flowing just below the surface.

Financial issues are usually not completely beyond solving, and rarely final.

Sherlock Holmes: “It may be that you are not yourself luminous, but that you are a conductor of light. Some people without possessing genius have a remarkable power of stimulating it.”⁴

I say, regardless of what your clients believe about their circumstances, shine a light on the possibilities, and that will have inestimable consequences in their lives and yours.

Footnotes:

1. https://www.thoughtco.com/what-is-a-fortiori 1689072#:~:text=Examples%20and%20Observations,probably%20be%20true%20as%20well.%22.
2. https://www.gotquestions.org/a-priori-posteriori-fortiori.html.
3. “Thank You for Arguing: What Aristotle, Lincoln, and Homer Simpson Can Teach Us About the Art of Persuasion,” by Jay Heinrichs, 432 pages, Kindle Edition, First published February 27, 2007.
4. “The Return of Sherlock Holmes,” by Arthur Conan Doyle, Sherlock Holmes Series, Publisher: Book-of-the-Month-Club, Release Date: January 1994, ISBN: B000B11TGC.

The basic processes of human life include growth, differentiation, respiration, digestion, organization, metabolism, responsiveness, movements, and reproduction. All of these processes are interrelated. These processes continue for as long as the human being lives.

The financial services industry operates on the principle that human life is never static, fixed, or inflexible. The financial plan that a client establishes is the foundation of an iterative process that requires monitoring, evaluating, and adjusting as life changes over time.

Michelle Singletary is a reporter for the Washington Post. She specifically writes about personal finance matters. Recently Ms. Singletary recorded this family memory:

“On one family vacation to the beach, my sister slipped in a few feet of water. She had trouble standing and began screaming for help, fearing she might drown.

‘Just stand up,’ I yelled.

The water was literally just above her knees, but she couldn’t regain her balance because, as a non-swimmer, she felt helpless. By the time I reached her, she was hysterical.

She was never at risk of drowning. But it didn’t feel like that to her.”¹

This story reflects two totally distinct viewpoints held by two different people at the exact same time, with two completely diverse experiences. Time is a key part of being alive. Time and history flow together. And yet, individual people sharing the same moments can still have widely divergent perspectives.

Consider the times we are living in. In this crazy period of human history independent financial professionals (IFPs) are attempting to guide all their individual and distinct clients. What are the characteristics that define these financial times?

• Geopolitical events. The war in Ukraine, tensions with China, etc.
• Supply chain disruption. COVID-related disruptions continue.
• Bank failures. Recent failures of California-based Silicon Valley Bank and New York-based Signature Bank.
• High inflation. In 2022, the average inflation rate (using CPI data) was 8.0 percent.²
• Higher interest rates. To beat back inflation the Federal Reserve adjusted the federal funds target rate by five percent from March 2022 to May 2023.³
• Stock Market volatility. The S&P was down 19.4 percent for 2022.⁴

Not all clients act sanely, responsibly, or pragmatically in these harried times.
Michelle Singletary reminisces about the iconic scene in the Frank Capra classic, It’s a Wonderful Life, when desperate folks made a run on the Bailey Bros. Building & Loan. She urges us to recall what George Bailey says to the bank customers crowded at the counter:

“Now, just remember that this thing isn’t as black as it appears.”

Singletary: “It’s not useful to tell folks not to panic when they fear their money is at risk. Much as it was with my sister, it’s hard to stay calm if you’ve lost your financial balance and worry you can’t stand up.”

Point: The period of history we are living in is rife with challenges for IFPs working diligently to guide their many and varied clients, especially when some of these clients feel they are losing their footing.

Process Means History
It is in the vicissitudinous stream of history that people have always found themselves. To successfully navigate their times and circumstances, people look for available and reliable solutions, safe harbors, and dependable processes.

History means process.

Conversely, as John Murray wrote in his Commentary on the Epistle to the Romans, “Process means history.”⁵

Process is defined as “Something going on; a series of actions or operations conducing to an end; phenomenon marked by gradual changes that lead toward a particular result.”⁶
In other words, a process takes place in time. In history. It was appointed for us to live now, in this time period, and the convergence of events and forces that we experience day-by-day require a meaningful and dynamic process for handling our whole lives, including our financial affairs.

Process Meets Principle
Process, to be fruitful, must be built on proven practices and principles. To achieve financial goals of security and sustainability, people have long followed these simple practices:

• Budgeting
• Saving
• Retirement planning
• Investing
• Insurance

In addition, successful achievement of financial goals is accomplished by adhering to time tested financial principles, such as these:

1. Spend less than you earn.
2. Pay yourself first by setting aside savings.
3. Make proper use of tax deferral and tax-free opportunities.
4. Maintain an emergency fund.
5. Diversify the allocations of investable assets.
6. Hold onto investments for the long term.

Point: Financial planning is a long-term process. Strategic goal setting, relying on timeless principles, and avoiding impulsive decisions are essential to a holistic approach to managing financial affairs. The elements of proper financial planning are as well-known as are the principles undergirding achievement of financial objectives.

Question: Then why do so many people fail to reach financial success?
Answer: Lack of leadership and coaching. Fundamentally, clients need someone to hold them accountable.

There are many reasons why people should solicit the assistance of an IFP, but none more important than the role of accountability. Clients need an IFP to look over their shoulders in order for them to act responsibly under changing circumstances.

When acting on their fears, clients will inevitably make their financial lives worse.

IFPs are Leaders
The IFP who maintains continuous close client contact will keep them mindful of their top financial goals. The IFP urges stubborn adherence to these goals when clients waffle and wiggle under overwhelmingly difficult financial news.

“One of the best paradoxes of leadership is a leader’s need to be both stubborn and open-minded. A leader must insist on sticking to the vision and stay on course to the destination. But a leader must be open-minded during the process.”—Simon Sinek

Notice, however, that in addition to staying focused on the original vision, the IFP is also the person skilled enough to know how to adjust the process by which the goals are to be achieved.

Leadership Is Needed When Stuff Happens
“Most people don’t like change. They revolt against it unless they can clearly see the advantage it brings. For that reason, when good leaders prepare to take action or make changes, they take people through a process to get them ready for it.”—John C. Maxwell

Clients live within the sweep of human history, and they also have their own individual and family stories. Like all stories, there are good and also difficult things that happen. The reality is that every story involves change. That is when the IFP is most needed. When changes occur in the client’s situation or in the economic, political, or regulatory environment, a very present and involved IFP is able to help the client to:

• Understand how the change(s) will impact financial goals.
• Develop emotional intelligence to accept new realities.
• Grasp the importance of making needed adjustments.
• Appreciate the urgency and take the actions that these important matters deserve.
• Take fresh stock of their income, expenses, and debt.
• Consolidate debt.
• Make modifications to current lifestyle in order to achieve a desired long-term lifestyle.
• Readjust asset allocations in light of changing risk-reward relationships.
• Confidently stay the course with certain investments and strategies, while steering away from others that once made sense but no longer do.

Point: Because history unfolds like a sheet in the wind—haphazard, and unpredictable—clients often have to make difficult decisions. Remember that in the movie, It’s a Wonderful Life, poor George Bailey had to use his honeymoon money to keep the savings and loan open. In these moments, there is great comfort in the helpful advice of an IFP.

Summary
The writer E.B. White noted the following: “The only sense that is common in the long run is the sense of change and we all instinctively avoid it.”

Independent financial professionals know that financial planning is a process, and process means history. Every client makes financial decisions in stages, through various phases of their lives, and these decisions require revisiting.

Since clients run the risk of acting wrongly out of fear, or acting too late because of indecision, they benefit greatly from the accountability and objectivity of a thoughtful IFP.

Sometimes we just need to hear another person tell us to “Just stand up.”

If you are an independent financial professional, will you be there when your client needs you to speak those words?

Footnotes:

1. https://www.washingtonpost.com/business/2023/03/15/money-anxiety-financial-news/.
2. https://www.usinflationcalculator.com/inflation/current-inflation-rates/.
3. https://www.forbes.com/advisor/investing/fed-funds-rate-history/.
4. https://money.usnews.com/investing/stock-market-news/will-the-stock-market-crash-again-risk-factors-to-watch.
5. “The Epistle to the Romans,” by John Murray, Westminster Seminary Press, December 2022, ISBN: 9781955859035.
6. https://www.merriam-webster.com/dictionary/process.

“There are three ingredients in the good life: learning, earning, and yearning.”
—Christopher Morley

Bread is a common food source throughout the world and has been a staple of human diets throughout the ages. It comes in multifarious shapes, sizes, and flavors. I enjoy all kinds of bread and delight in any meal that includes a Bagel, Baguette, Boule, Breadstick, Brioche, Ciabatta or Focaccia. I like a chewy crust, an open crumb, and a moderately soft interior. I am addicted to Panera’s Asiago Cheese bagels!

The dictionary definition of bread is “a usually baked and leavened food made of a mixture whose basic constituent is flour or meal.”¹

What amazes me about bread is that all its various forms are made from roughly the exact same stuff.

“The basic ingredients in bread are flour, liquid (usually water, milk, or fruit juice), salt, shortening and sweeteners. Each performs a specific task.”²

Bread Ingredients
Each of the building blocks of a great bread are essential and serve a specific function:

• Flour: Provides the principal dough component and gives the bread the unique flavor of the grain used.
• Liquid: Causes the bread to release the gluten in the flour protein, thereby stretching the dough and making it resilient.
• Yeast: Adds flavor, but importantly, yeast leavens (lightens) the dough, and stimulates rising by forming carbon dioxide gas bubbles as it ferments.
• Salt: Controls the rising action of the yeast and also enhances the flavor.
• Shortening: makes the bread tender and enhances freshness.
• Sugar, honey, molasses, and other sweeteners: Provide energy for the yeast, add flavor, and link with the protein to form the bread`s brown crust.

Point: Based on the exact same ingredients (with each ingredient serving specific purposes) all the different types of bread ensue from the way the ingredients are mixed, handled and baked.

Financial Plan Ingredients
A financial plan is similar to making bread. All people who operate from a financial plan share the same general ingredients. The plan begins with a person’s current money situation, including existing assets, liabilities, indebtedness, net worth, income, budget, financial risks, and long term monetary goals.

Each of the ingredients of a financial plan are essential, and they individually serve distinct purposes:

• Financial goals: Just as a baker decides ahead of time what kind of bread to bake, so too a person must seriously consider what she wants to accomplish with her money. The most valuable asset that any person has is time. There are financial goals that are short term (buying a new car), medium term (paying off debt), and long term (a comfortable retirement). The unique nature of these durations requires specific planning and tailored funding.
• Net worth: Just as a baker begins with a full measure of flour, so each person needs to establish a financial baseline, so he should determine his net worth. He first makes a list of all his assets (qualified plan balances, bank and investment accounts, real estate) and secondly, he needs to add up all his debts (credit cards, mortgages, student loans). His assets minus his liabilities equals his net worth. Net worth is an integral factor in establishing both urgency and risk tolerance.
• Budget and cash flow: A person’s spending habits, giving patterns, obligations, and the ongoing results of past decisions all converge to create total monthly expenses. She must record each expenditure and then assess them as to whether they are must-have items such as groceries and rent, or nice-to-have items such as sport betting. Cash flow is to financial goals what yeast is to gluten. For assets and net worth to grow toward financial objectives, there must be investable cash.
• Emergency funds: If a person is without an emergency fund, she may be forced to rely on high-interest credit cards, drain her 401(k), or take out a loan to afford the unexpected expenses of a sudden financial need. Just as salt acts as a yeast inhibitor, emergencies can negatively impact her long term financial security.
• Insurance coverage: Just as bread requires a heat source in order for the mixture of ingredients to cohere into bread, financial goals require consistent income sources and protection against disruption in order to be accomplished. Insurance is an important part of protecting herself and/or her loved ones in the face of the financial downside of her illness, disability, or death.
• Investments and savings: A person’s saving and investment strategy should be designed based on his personal and family goals, the time frame and his risk tolerance. His clearly defined goals will help him determine how much needs to be invested, how to invest it, and the amount of risk he is willing to take. Just as sweeteners, nuts, and seeds can turn any bread into a delectable treat, the proper portfolio of investments can become the bells and whistles of a successful financial life, including a secure retirement.

Point: A sound financial plan matches realism with dreams, practicalities with reasonable risk, and frequently reviewed strategies with well thought out goals. The result is a sweet-smelling, satisfying financial life.

Independent Financial Professionals as Bakers
There is a very useful formula used by bakers. Some call it the “golden ratio.” The formula specifies the proportional weight of the four essential ingredients: Flour, water, salt, and yeast. Assuming the total amount of flour is 100 percent, the proportion of each ingredient is as follows: Liquid = 60 percent, Salt = two percent, and Yeast = one percent. Additionally:

• The weight ratio of flour to liquid is normally five to three.
• The weight of salt is normally two times that of instant yeast.

After a baker has selected the ideal flour for her bread, there are a few more elements that make a good loaf of bread even better.

When selecting water to add to the recipe, bakers know the following:

1. Hard water will toughen the dough and slow fermentation.
2. Very soft water will soften the dough, making it sticky.
3. Some tap water has an unpleasant taste such as from sulfur.
4. Distilled water is no good because some minerals are needed for good texture and flavor.
5. It is best to use bottled mineral water.
6. The best bread recipes call for fresh or active dry yeast mixed into warm water.
7. Direct contact with salt (without flour to buffer it) will kill yeast, so good bakers always mix the yeast into the flour before adding salt to dough.
8. The best bakers use non-iodized salt such as sea salt because iodized versions can impart an unpleasant flavor. They know that fine salt is better than coarse because it is easier to measure.

Similar to great bakers, the best independent financial professionals (IFPs) create recipes for financial success for their clients. The ingredients look like those of any story because that is the IFP’s role: Help clients write their financial story. These ingredients are as follows:

• Who is dependent on you now or will be a part of your life in the future?
• What will you hope to be doing in the coming years?
• Where will you live and work?
• When do you hope to enjoy the fruits of your labor?
• How will you take care of your loved ones and dependents should anything happen to you?
• Why are you accumulating wealth and why do you spend money the way you do?

IFPs frequently direct their clients to proven formulas, measures, and benchmarks. Consider the following:

1. A person should spend 28 percent or less of her monthly gross income on her mortgage.
2. A prudent person puts away at least three to six months’ worth of expenses in an emergency fund.
3. The person who wants to be responsible usually owns life insurance equal to 10-15 times her current income.
4. People in their 20s should save 10-15 percent of their pre-tax income. If they wait until they are in their 30s this should be increased to 15-20 percent of their pre-tax income. Those who waited until their early 40s should set aside 25-35 percent of their pre-tax income.
5. People looking forward to retirement should plan on needing 70 percent of their pre-retirement yearly salary to live comfortably.
6. When a person retires, she should add up all of her investments, and withdraw four percent of that total during her first year of retirement. In subsequent years, she can adjust the dollar amount she withdraws to account for inflation.

Point: Just as bakers use learned techniques, their experience, and collective wisdom through the ages to create amazing bread, so also do great IFPs use their training, education, experience, proven techniques, known success patterns, and recognized guidelines to guide their clients through their financial lives.

Summary
Has a smell ever made you remember a specific event or time in your life? Many people smell fresh bread and are immediately transported back in time to a grandmother, mom, or favorite bakery. “Odors have the exceptional ability to instantaneously trigger vivid autobiographical memories—a phenomenon referred to as the Proust effect.”³

In his masterpiece novel, “Remembrance of Things Past: Volume I – Swann’s Way,” Marcel Proust wrote: “When nothing else subsists from the past, after the people are dead, after the things are broken and scattered…the smell and taste of things remain poised a long time, like souls…bearing resiliently on tiny and almost impalpable drops of their essence, the immense edifice of memory”⁴

Similarly, the work that an IFP does with clients will long be remembered for the impact on people living comfortably in retirement, sending their children to college, paying off mortgages, leaving behind a financial legacy, and having protection from financial risk of loss from illness, disability, and death.

IFPs can help their clients enjoy the sweet fragrance of the three ingredients of the good life: Learning, earning, and yearning.

Sources:

1. https://www.merriam-webster.com/dictionary/bread.
2. https://www.chicagotribune.com/news/ct-xpm-1985-01-24-8501050406-story.html.
3. https://web.colby.edu/cogblog/2015/11/22/smelling-your-memories-the-positive-and-negative-of-the-proust effect/#:~:text=Odors%20have%20the%20exceptional%20ability,as%20those%20related%20to%20smells.
4. Swann’s Way (À la recherche du temps perdu #1) by Marcel Proust, Lydia Davis (Translator) Published November 30th 2004 by Penguin Classics (first published November 14th 1913).