My friend Carl Richards recently posted this sketch; I think it captures something critical to the work of financial advisors, and central to the reasons we founded Blueleaf.
Feeling peaceful when thinking about money shouldn’t be rare.
In my conversations about money, the most common desire people express is a simple desire for peace. We all just seem to want to get out from under the constant stress that so often comes whenever we talk or think about money. Money is insanely emotional because of what it often represents. When we talk about money we are talking about our closest-held dreams and goals.
…While it is often a rare event to be thinking about money while at the same time feeling peace, let’s all hope we can make decisions so that it happens more often.
This sketch was shared courtesy of Nancy Robinson who is doing some really great things around financial literacy at fariseducation.com.
At Blueleaf we’ve learned something fascinating and (to some) counterintuitive. When provided with clear, simple, consolidated information about your money on a regular basis, you feel better, calmer and more in control. That’s right:
Feeling in control
More peace of mind.
But it has to be the right kind of information.
Conventional wisdom: information makes people more fearful
Most people and most advisors think that having more information about our money makes us uneasy. As a result of knowing “too much” people become restless and want to make changes just to “do something” in a counterproductive effort toward self preservation. And there is some truth here, especially in bumpy markets.
But it’s not information that causes problems. It’s the high volume of fragmented data and irrelevant noise that drives us mad. CNBC, ticker streams, and contradictory information from multiple places in different formats adds to the noise and confusion and that makes any reasonable person edgy. Incomplete information makes us react incompletely, and our knowledge that it’s incomplete just adds to our stress. This is “the CNBC effect.” The academic version is described here. Until now, that kind of “information” is all we’ve had available on demand.
Advisors have rightly responded with the advice “don’t listen to the noise.” Unfortunately many also say, “just look at our annual or quarterly reports and ignore everything in between.” While some may argue that infrequent contact with our long-term money is ideal in some perfect world, it ignores one key fact: we’re human. Time passes and things happen between annual meetings and quarterly reports that create questions and give us pause. We live in a world where information fragments flow at a frightening rate and “ignoring it” till the next scheduled pit stop on the information rationing highway just adds to our stress and makes us MORE likely to think irrationally.
To be fair, advisors haven’t had tools to help their clients filter the noise and focus on what’s important. Their comprehensive and often excellent reports involve lots of manual work to prepare (and sometimes to read and understand). So even quarterly reports are often more than many advisors can afford to do for their clients.
ALERT, Shameless Sales Pitch Ahead!
The Blueleaf approach: Filter the noise with client-centric information
At Blueleaf our response has been to create light, simple, consolidated information, the right information, then deliver it at weekly or monthly intervals as well as having it available on demand. The key is to interrupt the news cycle with information that is clear and about the client. Blueleaf becomes a noise filter.
The results have been amazing.
Clients are calmer and more aware. Advisors spend less time answering questions on data or talking clients “off the ledge” and more time advising, focusing on goals and how to achieve them. Advisors tell us that their clients understand what is going on and are easier to advise.
An interesting statistic about the clients on the Blueleaf platform: 75% of them interact with their financial information at least monthly and 100% do so quarterly. And advisors tell us they are EASIER to service! These clients are not special. Before coming on to the platform, these same people ignored their monthly statements and couldn’t tell you how they were doing. Client satisfaction is up and that means good things.
END Shameless Sales Pitch
How do you keep clients informed and calm?