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Education—The Missing Piece of the Investor Success Puzzle

Being a good financial adviser requires mastery of a wide range of technical skills. Being a great financial adviser requires having skills as a counselor and psychologist. Being an outstanding financial adviser requires developing your skills as a teacher. Here’s why.

The job of a financial adviser is to help each client get from Point A (where they are today) to Point B (where they want/need to be at some point in the future). The question is always how to maximize the chance that the client will arrive safely and securely at Point B.

When I first entered the financial services industry, the focus was on the technical aspects of this journey. Advisers used their financial planning and investment skills to define and plot the course from Point A to Point B.

Later, the focus broadened to include another dimension of the problem. Supporting clients emotionally and coaxing them to do the right thing has always been part of the job. But our understanding of the importance of that aspect of advising clients changed when research from the world of behavioral finance entered the mainstream.

Soon we were awash in new jargon that labeled each quirk in the vast inventory of our financial decision-making dysfunctions. A tsunami of information familiarized us with the basic concepts of behavioral finance, but left us unsure about what, exactly, to do with this information.

One exception is the area of risk tolerance. A host of service providers emerged with products that purport to help us measure the risk tolerance of our clients. But what should you do when there is a significant gap between a client’s need to take risk and their comfort in doing so?

Say you have a client that has done a poor job of saving over the years. The client has no choice but to be aggressive in their investment strategy if he is to have any hope of meeting his goals. But what if his tolerance for risk is very low? Do you ignore the client’s discomfort with risk-taking or do you dial down the portfolio in favor of a smoother ride?

Actually, this is a false dilemma. It assumes that the client’s risk tolerance is a fixed feature like the nose on his face. This is simply not true. Soldiers learn to fight with bullets whizzing by their heads. Athletes learn to maintain their focus in the midst of chaos. Clients can be taught to better weather the inevitable storms they will encounter. Education is the key.

Most advisers are comfortable answering client questions about investing, but this level of education is reactive and event driven. Exhorting clients to “think long-term” and “stay the course” is not education, it’s sloganeering.

Being a good investor requires a solid frame of reference. Clients need to know what to expect and why things happen the way they do. They need that course we all should have had in school, but never did. Providing this level of education requires thought, planning and a proactive approach. But like soldiers and athletes, clients can be trained to be better, more confident investors.

If you want your clients to make it successfully from Point A to Point B, you should put as much time into teaching them about the journey as you do developing financial plans and investment solutions for them.



Scott MacKillop
First Ascent Asset Management
Denver, CO

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Let Your Voice Be Heard: Register for FPA Advocacy Day

There may be elected officials who aren’t familiar with the financial planning profession or its relevant issues. That’s something Financial Planning Association members could change.

Registration is now open for the organization’s third annual FPA Advocacy Day in Washington, D.C., which will take place June 21-22. The event is designed to provide CFP® professionals with an opportunity to advocate for the profession and issues important to practitioners.

“It’s a great way to understand how advocacy works in our country and why it matters,” said Karen Nystrom, the advocacy team leader for FPA.

With the help of lobbying and consulting firm, The Raben Group, FPA will set up meetings with elected officials, prepare any materials you may need for those meetings and provide training to help you better communicate your message to your legislators.

Chapters organize their own state Advocacy Days, said Dave Panko, CFP®, of  FPA of Central Pennsylvania, and both the state and national events should be on all members’ calendars.

“It was very well-organized on FPA’s part,” Panko said in an FPA Advocacy Day 2015 recap video. “We had all the materials we needed and we had directional maps, etcetera. I highly recommend that every single chapter in the United States has an Advocacy Day and comes to participate in the Washington D.C. Advocacy Day.”

The national event is unlike any other, Nystrom said. “There is nothing like marching up to Capitol Hill with your fellow FPA members to let our elected officials know who we are.”

Past Advocacy Day participants share that sentiment.

“To be part of a dedicated group of individuals who were able to meet with our legislators and pave the way to building a relationship was awesome,” Dusty Hoetger, CFP® said in a testimonial about the event, posted on the Advocacy Day page. “The journey to change begins with taking that first step. By participating in Advocacy Day, you are taking a step not only for yourself but your profession as a whole.”

Some other benefits of attending the event, Nystrom said, include:

  • Meeting like-minded members
  • Getting the opportunity to serve on financial services committees
  • Offering to provide pro bono content to elected officials in their districts
  • Using your experience to let your community know you are involved
  • Seizing a great opportunity to tweet about your meetings (don’t forget to include photos of you and your elected officials) to clients and others

The event’s cost covers meals and training and the deadline to register is June 3.


Ana Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.

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Oh the Capabilities! FPA launches Professional Development Center

PDC_Guide.inddMany of us might not know the full capabilities of our smart phones, then we discover a cool, new-to-us feature that we’re over the moon about. “Wow,” we might think. “I didn’t know my phone could do that!”

Having a smart phone that you don’t use to its full capacity is kind of like being a member of a professional association and not utilizing all the educational and professional development features it has to offer you. Until now, finding all those features may have been difficult for Financial Planning Association members.

But it shouldn’t be difficult anymore.

FPA recently launched the Professional Development Center, an integrated learning environment with the highest-quality live, virtual and self-study content curated for you. FPA put in one place everything you’ll need to learn your way.

“This is the beginning of shifting our educational focus from primarily offering continuing education credits to being the most valuable continuous learning resource for all CFP professionals,” says George Bradley, director of professional development at FPA. “We are already hearing that our message and our integrated solutions are resonating with members.”
0115JFP PageSuiteCvr.inddThat message perhaps hasn’t been articulated well in the past, writes Journal of Financial Planning Editor Carly Schulaka in the Journal’s September issue.

“FPA has been delivering top-notch professional development to members since our inception,” Schulaka writes. And now FPA is articulating that message to make it easier for members to find educational and professional development opportunities. “The learning is in print, it’s live, it’s virtual. More importantly, it’s continuous and integrated.”

In your September Journal, you will find your Professional Development Center Guide, which will highlight all the features of the FPA Professional Development Center and guide you to its very own webpage, where you can find the latest professional education, community discussions, career development, the Journal, and practice management content and resources. Under those umbrellas are a number of other features including FPA Knowledge Circles, valuable webinars and MentorMatch, among others.

For all things learning and professional development, visit www.OneFPA.org/PDC. Download your Professional Development Guide here.

After reading the guide, you might say: “Wow! I didn’t know my association could do that!”