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Ep. 20: Meir Statman: Moving Client Conversations Beyond Money to Life
14 Plays2 months ago
Financial advisor value has traditionally centered on portfolio management. While that’s important, it’s no secret that many of those functions can now be replaced with technology.Creating “life well-being “rather than just “financial well-being” can help advisors provide a personalized experience that adds value beyond the portfolio, according to Dr. Meir Statman, Professor of Finance at Santa Clara University.In this episode of the Synergize podcast, Statman joins hosts Bill Coppel, Chief Client Growth Officer at TradePMR, and Ryan Neal, Senior Editor at TradePMR, to explore what this may mean for advisors looking to set their businesses apart in today’s competitive landscape and be positioned to capture the anticipated generational wealth transfer1.Listen as they explore:• Practical ways that may help advisors add value beyond the portfolio• Potential benefits that can come with crossing the boundary from money to life• Skills advisors may want to adopt to curate client well-being in addition to managing wealthSubscribe now, and connect with us on social media:• YouTube• LinkedIn• FacebookGet the transcript for this episode, with sources, at https://synergizepodcast.com/.About Dr. Meir StatmanMeir Statman is the Glenn Klimek Professor of Finance at Santa Clara University. His research focuses on behavioral finance, and he is the author of several books on the topic including "A Wealth of Well-Being: A Holistic Approach to Behavioral Finance."Meir’s research has been published in the Journal of Finance, the Journal of Financial Economics, the Review of Financial Studies, the Journal of Financial and Quantitative Analysis, the Financial Analysts Journal, the Journal of Portfolio Management, and others.He is a member of the Advisory Board of the Journal of Portfolio Management, the Journal of Wealth Management, the Journal of Retirement, the Journal of Investment Consulting, and the Journal of Behavioral and Experimental Finance. Meir also serves as an Associate Editor of the Journal of Behavioral Finance and the Journal of Investment Management.Meir received his Ph.D. from Columbia University and his B.A. and M.B.A. from the Hebrew University of Jerusalem.Dr. Meir Statman and Santa Clara University are not affiliates of TradePMR.More About Dr. Meir Statman:LinkedIn: https://www.linkedin.com/in/meir-statman-17967b/Website: https://www.scu.edu/business/finance/faculty/statman/Book: A Wealth of Well-Being: A Holistic Approach to Behavioral Finance If you want to join the conversation or connect with us, please visit us at synergizepodcast.com. This content is provided for general information purposes only. The views expressed by non-affiliated guest speakers are their own and do not necessarily reflect the opinion of TradePMR or its affiliates. TradePMR and its affiliates do not endorse any guest speakers or their companies and therefore give no assurances as to the quality of their products and services. This channel is not monitored by TradePMR. TradePMR does not provide investment advice, tax advice or legal advice. TradePMR is a member of FINRA and SIPC. TradePMR, Inc. is registered with the Securities and Exchange Commission {SEC) and the Municipal Securities Rulemaking Board (MSRB). TradePMR provides brokerage and account services to registered investment advisors. Custodial services provided by First Clearing. First Clearing is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo & Company. Copyright 2025.TradePMR, Inc. For a transcript of this episode with sources, visit synergizepodcast.com. 1Cerulli Anticipates $124 Trillion in Wealth Will Transfer Through 2048, Cerulli Associates, Published Dec. 5, 2024.#RIA #WealthMangement #FinancialAdvisor #Strategy #Personalization #tellingyourstory
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Transcript
Introduction to Synergize Podcast
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Welcome to Synergize, unscripted conversations where we explore the evolving role of the financial advisor in an emerging AI driven world.
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Join us as we bring together thought leaders across a range of disciplines and industry experts, sharing insights designed to help RIAs thrive in the industry of tomorrow.
Meet the Hosts and Podcast Focus
00:00:23
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Hi, I'm Bill Capelle, Chief Client Growth Officer at Trade PMR.
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And I'm Ryan Neal, Senior Editor at Trade PMR, and welcome to the Synergize Podcast.
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Ryan, Synergize is all about helping firms grow.
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And so when I think about what it takes to grow a business, I start with a simple question.
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What does creating value as an advisor mean today?
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To figure this out, I start by trying to identify two things.
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First, what's changed over the decades?
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How are things changed?
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How are people living differently?
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what has new technology done to the way we make decisions and interact with one another as an example?
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And the second one is, why has the traditional way we have served clients may not be working as well as we go forward?
Challenges in Client-Adviser Relationships
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Based on what we're seeing at Trade PMR, which I think is backed up by research across the industry as well as what the journalists are covering in the trade press, is clients are looking for three things, right?
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One, they're looking for a more personalized experience.
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Two, they probably haven't thought much about the wealth transfer.
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And three, a lot of them probably view their financial advisor as primarily focused on managing their money.
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And then you add to that the fact that many financial advisors tend to focus on just one party in the household.
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So, you know, the husband or wife who's really more active in managing the finances.
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And the advisor tends to not build a relationship with the other folks in the family, the spouse.
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And advisors often don't know the client's children, like, at all.
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I know my mother worked with a financial advisor.
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I've never once heard from him.
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And I think that's fairly common in our space still.
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Well, you know, you're right.
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And I can attest this from my own personal experiences.
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I've had several advisors over the years, and it wasn't till my most recent advisor that they ever even asked me about what was important to my spouse or for that matter, what was important to my children.
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And my current advisor did that when we met, we sat down and we talked about it.
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And I was very impressed with the way he and she tried to bring the entire family into the conversation.
Technology's Impact on Advisory Roles
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Right.
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So we have that dynamic.
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And then another thing that's changed is that, you know, just portfolio management, it's still important.
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It'll always be important.
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You know, folks want to know how their money's going.
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We want to make money.
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We want to do better for our future.
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But a lot of that can be replaced now with technology and your clients know that.
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It's no secret.
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So what it boils down to is clients are looking for help with things that they can't get or do on their own or that technology can do.
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They want to use technology, but things that they can't just get from it.
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And also what they're not sure of.
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And oftentimes clients don't even know what they need from advisors.
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So how can advisors step in and kind of handle that stuff that they may not know that they even need?
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I couldn't agree more, Ryan.
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In fact, they ought to take a page out of Steve Jobs' book, you know, when he created the iPhone, and he really brought something to the market that we didn't even realize that we needed.
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And I think that's really a big part of what's going on today because I think as an industry, we have trained clients to have a very narrow view of what they can expect from an advisor.
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And so when I think about that, you know, I stop and ask a couple of really important questions in light of the fact that, you know, we're going to see this enormous wealth transfer over the next two decades.
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70 percent of people receiving that money, the heirs to that money are going to fire their employees.
Wealth Transfer and Relationship Building
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their their parents advisor and such a big portion of that group includes gen y and gen z which we have very little contact with in addition to that 70 of women will replace their financial advisor upon the death of a spouse or perhaps a divorce these are very telling facts
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And I think it's really important that we step back for a moment and we go back to that question I mentioned briefly a second ago, which is with this very narrow expectation clients have today, which we've successfully trained them in, as I said, we really need to stop and think about how we got here.
00:04:29
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in the basis of our business has primarily been product driven now we can call it advice today and we can charge for fee for it which many many advisors do but at the end of the day we're having a we're having a challenge going from being product based to really problem solving so to address this
Integrating Money and Life - Mayer Statman's Views
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we have a very special guest today mayor statman
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It is really, really important to cross that boundary from money to life.
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Money and life are just intertwined.
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And in fact, separating them is what is artificial.
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It is awkward at first, but you have to do it.
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You must do it because the traditional skills of advisors are now done by robo-advisors.
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Artificial intelligence will do it even better.
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If you are going to compete,
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In the coming environment or even today's environment, you have to be a well-being advisor, not just because this is the right thing to do, but it also because it is the right thing to do for you as a professional who cares about his business.
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Mayer is a professor of finance at Santa Clara University and more importantly, he's an author of a new book entitled A Wealth of Well-Being, A Holistic Approach to Behavioral Finance.
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To learn more about Mayer's work, his research and other books he's written, please visit our show notes.
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So Mayer, welcome to Synergize.
00:06:04
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Well, I'm delighted to be with you, Bill and Ryan.
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Or great, it's great to have you with us.
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This is an important subject.
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You know, as a financial advisor for many years, I can relate to this and you know, we continue to try to do things the same way over and over again and wonder why we don't get different results.
00:06:21
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So let me start with this question.
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A lot of your work and research has been around the notion of life well-being, and I talk a lot about well-being, and financial well-being.
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Share with us how these two connect.
00:06:36
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So when we talk about financial well-being, and of course, advisors and people in finance focus on that, financial well-being is about balancing saving and spending today and in the future, such that you have enough, say, in retirement and enough to withstand a financial crisis.
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Life well-being is much broader than that.
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Life well-being includes, of course, finances, but it also includes family and within that children and spouses, and includes friends, and includes health, and includes work and education and religion and society.
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So we need financial well-being to enjoy life well-being.
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You cannot support a family without money, but it is life well-being that we ultimately seek.
00:07:37
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So with that in mind, how does that fit into the context of our listeners, those in the wealth management profession, especially independent financial advisors, and then your own thinking as an economist, researcher, that whole area of wealth management, how does this concept fit into that?
Life Well-being Over Financial Security - Personal Stories
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So let me begin with an example from our own life.
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It is interesting how my colleagues in finance, many of them, are able to separate their own lives from their academic lives and research.
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And so, for example, they know that trading more is going to be bad for your wealth, and then they still trade.
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I learned from my own life.
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I served myself as a laboratory.
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And I know that when I was done with my studies at the Hebrew University, I got a job as a financial analyst at a large company.
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And it provided financial well-being.
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That is, it paid enough to support my family.
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There was a pension at the end.
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What more do I need?
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Well, of course, I needed a lot.
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It was boring.
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It was not providing me life well-being.
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And so I took what, objectively speaking, is a big risk coming to the United States to get a PhD, having no idea what I will do next.
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But I knew that aspirations matter to me and I knew that life well-being matters to me.
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And so I connect that to all aspects of my research.
00:09:26
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And in my research, it's kind of interesting how, of
Educating on Life Well-being and Finance
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course, I've been at Santa Clara University for more than 45 years now.
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And so what am I doing?
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Well, I'm doing is pushing the profession.
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I'm actually pushing myself and pushing my profession to do better.
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And my students, you know, that is when I teach my students.
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I teach them, of course, about portfolio theory and marketing efficiency and options and futures, but also teach them about life well-being.
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I, for example, give them a list of why is money important for you?
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That is financial security, helping my kids, and so on.
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And I ask them to arrange it according to what is most important to them.
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and explain why.
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And then each of them comments on the submissions to others.
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And so they get into a conversation.
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And it is just absolutely fascinating how they sort of realize that, wait a minute, this is a course in investments.
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But investments is broader than I thought when I joined this course.
00:10:46
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And how delightful it is.
00:10:49
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Well, so that begs the following question as I think about what you said, and particularly that interaction that you must witness among students as they go through this process.
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It really humanizes it at some level.
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Does money buy happiness?
Income, Happiness, and Life Well-being
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I know that there's been a lot of research done around that, great works by Daniel Kahneman and Angus Deaton, and they kind of mathematically figured out what that number was.
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What is that connection between money and happiness?
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Because it sounds to me like part of that experience you created in the classroom begins to bring out the value of not just the investment, the impact on our lives.
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Absolutely, yeah.
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So when you talk to scholars of well-being and ask them what they found about what is most important in life, what's important in life well-being, they're likely to say what's important is family, what's important is relationships, what's important is marriage.
00:11:51
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But of course, you need money for all of them.
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And money itself...
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sometimes get denigrated by people who study well-being.
00:12:02
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But of course, money is really important in Kahneman and Deaton.
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And others have noted that.
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So what Kahneman and Dieter found was that evaluative well-being, that is the answer to the question of how do you assess your life as a whole?
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Is it a zero?
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Is it a two?
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Is it a nine?
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Is it a 10?
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That increases without limit with income.
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The reason for that is, you know, you ask yourself, why does somebody with wealth of a billion dollar want two billion dollars?
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The answer is that he's competing with somebody who has three billion dollars.
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That is, we judge ourselves differently.
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by comparison to our comparison group.
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But they also found that when you get to experience well-being, that is how do you feel right now?
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Happy, sad, interested, boring.
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that kind of stops at 75,000 a year.
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Now, inflation has done its job since their publication of their paper, so now it is a bit more than 100,000.
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But subsequent work by Killingworth
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found that it is not so, that even experienced well-being increases with income.
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So income by itself really, really matters.
00:13:44
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Wealth really, really matters.
00:13:47
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But what is even more important is that wealth is not everything.
00:13:54
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You need it for everything, but it is life well-being that we want to reach.
00:14:02
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Yeah, I can definitely attest to that, living in one of the most expensive places in the world.
00:14:07
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I can tell you that as my salary has gone up, my enjoyment of New York City has gone along with it.
00:14:13
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But you're right, it's not everything.
00:14:16
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But I'd love to bring the conversation back to our audience, right?
00:14:19
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Financial advisors.
00:14:21
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So as Bill laid out in the intro, a lot of financial advisors haven't really shifted their thinking in a long time just around portfolio management.
00:14:30
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So in light of this, when we're talking about well-being and we're talking about that overall picture that includes finances, how can advisors start to evolve their thinking, evolve how they serve their clients in order to capture finance as part of this more holistic well-being approach that you're talking about?
Evolving Advisors into Well-being Advisors
00:14:48
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I think of financial advisors as well-being advisors rather than financial advisors.
00:14:54
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And I think about them also as financial physicians.
00:14:59
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And so if you think about this analogy, you want a physician who is at the frontier of knowledge in medicine.
00:15:06
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And you want, of course, a financial advisor who is on the frontier of knowledge of finance.
00:15:13
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But you also want bedside manner.
00:15:17
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You also want hand-holding.
00:15:20
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If you think about it, and I can tell you stories from our own life about differences between physicians,
00:15:27
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Some physicians really listen to you.
00:15:29
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Some physicians listen between the lines.
00:15:33
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Some people, some physicians ask questions that lead them to disclose, that leads you to disclose things that really are painful for you to disclose.
00:15:45
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And if you ask yourself, what is it that causes somebody to refer a friend to a particular physician,
00:15:54
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It is not so much the knowledge of medicine, but it is really that sense that this physician really listens to me.
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This physician really cares about me.
00:16:05
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The same, I think, applies to financial advisor.
00:16:10
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And so it is really important to
00:16:12
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for financial advisors to know that and to cross the line to that persona.
00:16:21
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As you said, especially with AI, the traditional work of financial advisors is really getting to be generic.
00:16:30
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I heard financial advisors speak to other financial advisors
00:16:35
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about estate planning in those states that have community property or not.
00:16:43
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And if it's not community property, then you have to guess who is going to die first in the couple.
00:16:54
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And it goes complicated from there.
00:16:56
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Well, you know, that is the kind of stuff that surely I did not get
00:17:02
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But AI can do that really very quickly.
00:17:06
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But AI cannot be a well-being advisor, a financial advisor who also cares about you as a person.
00:17:17
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So this is very insightful, Mayor.
00:17:19
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And I think that this is the subtlety that we as an industry are struggling to embrace.
00:17:25
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You know, it's how do we do that?
00:17:27
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You know, as you pointed out and using the parallel with medicine,
00:17:34
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I think clients today expect advisors to be competent, expect that they have the skills and their credentials to do it, like you would expect a physician to be appropriately educated.
00:17:49
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But what I want to do is I want to take it down another level and begin to align sort of the thinking you're sharing with us
00:17:58
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with actual skills that an advisor should consider adopting or certainly exploring to learn more about it.
00:18:07
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Let's think about this at that level for a moment.
Bridging Financial Services with Life Counseling
00:18:10
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And, you know, as you've observed students in your classrooms and how they've interacted with one another, share with our audience,
00:18:20
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A couple of the skills you think advisors should begin to consider adopting to make this, let's call it this bridge to curating well-being in addition to managing wealth.
00:18:36
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So what is really important is to cross from the financial to life.
00:18:43
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And that is really difficult.
00:18:45
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It is, sometimes I liken it to the difference between having a friend who you think of romantically and getting to the first kiss.
00:18:56
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What if she recoils instead of moving closer to you?
00:19:02
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So it is scary.
00:19:03
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to move from being a financial advisor, speaking about what the Fed is going to do and whether you have enough for retirement and so on, to talk about your family, talk about your marriage, talk about your children.
00:19:19
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And you mentioned family, you mentioned wives, husbands, children.
00:19:27
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It is really important
00:19:30
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One, because if you are going to serve clients well, you have to serve their families.
00:19:36
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And second, it's important for you as a financial advisor because, as was noted before, the vast majority of spouses leave their advisor who was speaking to the other person in the marriage, and the vast majority of them don't know the kids anymore.
00:19:57
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And so it is important for advisors when they speak to a couple to really speak to each of them as equals.
00:20:09
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And it is important for them to know the kids and to know the circumstances.
00:20:16
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You know, think about the simple things.
00:20:19
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I like to say it is better to give with a warm hand than a cold one.
00:20:27
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You know, bunny, of course, is nice when you get it when you're 65 and your parents die at 95.
00:20:35
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But surely it would have been nicer if you got it in your 20s when you can pay college loans and have a down payment for a house.
00:20:47
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And so it is really important to ask clients about those issues because
00:20:57
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and perhaps kind of give them some examples from the lives of others.
Financial Support in Family Life Stages
00:21:03
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I tell in my book, for example, my own story of when I got married, I was 22 and my bride was 21.
00:21:11
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And our parents said,
00:21:16
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set together and they, without us, you know, they sent us for a walk and they talked about how much each set of parents is going to give to the young couple to get them going in that beginning of their lives as a couple establishing a family.
00:21:39
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These are really important things
00:21:42
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both as serving clients well, as well-being advisors, and also the side benefit is that it is more likely under those circumstances that a spouse or children will not leave you as an advisor once parents or spouses are gone.
00:22:04
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Yeah, I love that, as you said, can you actually say it again for me, the giving with a cold hand, or giving with a warm hand rather than a cold hand?
00:22:12
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Yeah, this really is, you know, I mean, in some way it is obvious, but it is not obvious to all.
00:22:20
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That is, people are really afraid, parents, that kids are going to be spoiled if you give them money when they are young.
00:22:30
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Well, you know, perhaps not giving them money for a trip around the world, but if it is money for a down payment or the money for a wedding or money to pay off college loans,
00:22:43
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This is really a wonderful thing.
00:22:45
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And, you know, in a way, we say we invest in your children.
00:22:52
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It's kind of odd, you know, children are not stocks and bonds.
00:22:57
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But in some way, there is a reciprocal relationship.
00:23:00
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And someday...
00:23:02
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We are all going to be all decrepit and we hope that our kids love us and hope that they remember that we were kind to them when they were little and needy
00:23:17
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and they will reciprocate when we are old and needy.
00:23:22
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And you say, what if they don't?
00:23:24
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Well, what if your stocks go down?
00:23:26
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Every investment has risk, but I think that it still makes sense to invest in your children and family.
00:23:36
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Yeah, I can empathize with that so much because I think back to my own mother who taught me so much.
00:23:43
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But I worked through college.
00:23:45
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I took student loans to go to grad school, paid off my own.
00:23:48
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I really never took anything from my mom other than she helped me pay for some of the college.
00:23:52
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But after 10 years of paying off my student loan debt, she came in.
00:23:57
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I think she had an annuity that came up or something and was able to help me pay off the balance.
00:24:02
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I think we split it.
00:24:03
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I paid half it and she paid half the balance.
00:24:05
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was able to get out of student loan debt completely and like, oh my God, it was a life changer.
00:24:09
Speaker
It was absolute, changed everything that I could do with my life.
00:24:14
Speaker
So it was, you know, I can empathize a lot with what you're saying.
00:24:17
Speaker
It really kind of reminds me of that.
00:24:18
Speaker
Well, and you know, it is important to realize that
00:24:22
Speaker
that parents are not necessarily wealthy.
00:24:25
Speaker
And so it might well be a hardship for them.
00:24:28
Speaker
And you cannot expect more than can be reasonably expected.
00:24:32
Speaker
I asked my father when I was contemplating coming to the United States and I didn't know if my finances are going to be okay, I asked him for a loan.
00:24:44
Speaker
And he said, you know, Mayor, I would have loved to give you a loan, but you have a younger brother and sister and they will want to marry someday.
00:24:54
Speaker
And I would like to help them as I helped you.
00:24:58
Speaker
That, you know, it was painful, but that was so.
00:25:03
Speaker
But still, when my parents gave us money when we got married, they were in their 40s.
00:25:10
Speaker
They surely were not financially set.
00:25:13
Speaker
But they stretched out.
00:25:16
Speaker
They said, you know, we'll be fine, we hope.
00:25:20
Speaker
But the kids need it now, not when we are fully set.
00:25:26
Speaker
And so it makes sense to do what is necessary to do right now.
00:25:33
Speaker
Again, you know,
00:25:36
Speaker
Family is indeed really, really important.
00:25:40
Speaker
Most care for all the people is given by family members.
00:25:47
Speaker
And it is done with a warm hand.
00:25:50
Speaker
It is done with kindness.
00:25:54
Speaker
As I say, don't piss your kids off.
00:26:00
Speaker
You know, you really want to hold them close.
00:26:04
Speaker
You really want to have a family that is as close as possible.
00:26:11
Speaker
And, you know, one of the things that I'm hearing you say, Mayor, which I think is very, very important, is the fact that there really are no sacred things.
Incorporating Personal Life Discussions in Planning
00:26:21
Speaker
you know, sort of sacred places we can't go with a client today.
00:26:28
Speaker
You know, for years, you know, you didn't talk about, you know, their relationship with their spouse, perhaps.
00:26:34
Speaker
You didn't, you know, you didn't talk about health, perhaps.
00:26:37
Speaker
People were reluctant to volunteer information.
00:26:41
Speaker
I'm on the other end of sort of the age continuum.
00:26:44
Speaker
So Ryan is on one end and I'm on the other end.
00:26:47
Speaker
And I know growing up that we just didn't talk about money.
00:26:50
Speaker
I mean, there was food on the table, you had clean clothing and you had a roof over your head.
00:26:56
Speaker
And that defined happiness a little bit going back to Kahneman's findings and so forth.
00:27:01
Speaker
But the reality of it is, is today it's a very different world we live in.
00:27:05
Speaker
And what I hear you say relative to advice and guidance to advisors is there really isn't a subject.
00:27:12
Speaker
You should not be in a position or have a comfort level.
00:27:14
Speaker
You may not be comfortable, but you should not broach with your client because most of us as advisors are experiencing the same things that our clients are.
00:27:24
Speaker
And you had mentioned a little bit about sharing personal experiences or sharing experiences that you've witnessed through other relationships.
00:27:31
Speaker
So perhaps one of the things that you would endorse based on your research is don't be afraid to really go and talk about anything that's associated with their life.
00:27:45
Speaker
The way in which you do it's going to be important.
00:27:46
Speaker
Exactly.
00:27:48
Speaker
Exactly.
00:27:48
Speaker
It is really, really important to cross that boundary from money to life.
00:27:54
Speaker
You know, we don't speak about money to our friends.
00:28:01
Speaker
We don't speak necessarily about our health.
00:28:06
Speaker
But when we go to a doctor and the doctor says, lift your shirt, you know that it is not because he's curious about your chest.
00:28:15
Speaker
He wants probably to listen to your heart and find out if everything is okay with it.
00:28:21
Speaker
Well, the same applies here.
00:28:25
Speaker
When you speak with a financial advisor, you expect them to know the intimate details of your money.
00:28:34
Speaker
and what I'm saying is cross
00:28:37
Speaker
over when you are an advisor to the intimate details of their lives.
00:28:43
Speaker
I know it is awkward, but here is what I do when I speak with people.
00:28:50
Speaker
We have two daughters, the older one, we love them both and they love us.
00:28:57
Speaker
But the older one, Barbara, lives with bipolar illness.
00:29:05
Speaker
Now, when I tell people about that, their response is always empathy.
00:29:13
Speaker
And usually they trade me a story about their own lives because every life has points of pain.
00:29:26
Speaker
And when you disclose yours, you...
00:29:30
Speaker
prompt others to disclose theirs.
00:29:34
Speaker
And then you move from being acquaintances or colleagues to being friends.
00:29:39
Speaker
And the same applies to financial advisors.
00:29:43
Speaker
They don't have to be psychologists.
00:29:45
Speaker
I'm not a psychologist.
00:29:46
Speaker
They just have to behave like a good friend.
00:29:50
Speaker
And friends know some things about your
00:29:54
Speaker
that you might think private, that you don't disclose necessarily to other people.
00:30:00
Speaker
And once you begin to tell stories and listen to stories, people are going to be more likely to reciprocate by telling you about their stories and their lives.
00:30:14
Speaker
And now your financial plan is going to be a better financial plan because you know what the issues are.
00:30:20
Speaker
For example, if there is a disabled child in the family, when you have to have a trust, then you have to have planning as to what will happen next.
00:30:31
Speaker
when you, the parents are gone and so on.
00:30:34
Speaker
In other words, this is not idle curiosity that leads you to cross the line from money to life.
00:30:42
Speaker
It is because money and life are just intertwined.
00:30:46
Speaker
And in fact, separating them is what is artificial.
00:30:51
Speaker
It is awkward at first.
00:30:54
Speaker
But it works, you know?
00:30:56
Speaker
If you overcome it and there is the first kiss, maybe it would lean to a happy marriage, you know?
00:31:06
Speaker
And so it's always awkward.
00:31:09
Speaker
but you have to do it.
00:31:12
Speaker
And as was mentioned before, you must do it because the traditional skills of advisors are now done by robo-advisors.
00:31:25
Speaker
Artificial intelligence will do it even better.
00:31:28
Speaker
If you're going to compete
00:31:30
Speaker
in the coming environment or even today's environment, you have to be a well-being advisor, not just because this is the right thing to do, but it also because it is the right thing to do for you as a professional who cares about his business or her business.
00:31:49
Speaker
Well, that's excellent.
00:31:50
Speaker
I mean, the big takeaway I'm sort of hearing is it's almost like a shift from that, that ABC, you know, the always be closing mentality to just be a human mentality, always be a human.
Generations of Behavioral Finance Skills
00:32:00
Speaker
But I'd love to ask you maybe to wrap this conversation up for our listeners out there who are firm leaders or financial advisors.
00:32:08
Speaker
What are three skills that you think they could start doing or things they could embrace to start making the shift that we've been talking about?
00:32:15
Speaker
So, you know, I talked about becoming a well-being advisor, and I will not repeat that.
00:32:22
Speaker
Let me just use those three items to talk about the three generations of behavioral finance and the skills that they involve.
00:32:33
Speaker
So in the first generations, what he said is people are not rational.
00:32:38
Speaker
People commit all kinds of cognitive and emotional errors.
00:32:42
Speaker
One service that advisors can provide is teach people about them, about framing, about hindsight, about regret.
00:32:51
Speaker
And it is really very important for all of us, advisors or teachers, to begin by saying, hey, I know that from my own experience.
00:33:01
Speaker
Here is what I have that I am conveying to you.
00:33:05
Speaker
I have knowledge that you don't yet have, and I am your teacher.
00:33:10
Speaker
And so you can teach them about the kind of traditional stuff that we think of as behavioral finesse.
00:33:17
Speaker
teaching them about those errors and how to avoid them.
00:33:21
Speaker
In the second generation, what I did was to move from irrational people to normal people, people like you and me.
00:33:32
Speaker
And I said, look,
00:33:34
Speaker
People want utilitarian benefits, that is money.
00:33:38
Speaker
And when you buy a car, you want to have good gas mileage and safety and so on.
00:33:45
Speaker
But you also want to have expressive and emotional benefits.
00:33:49
Speaker
The car in some ways says who you are and it makes you feel...
00:33:54
Speaker
proud or adventurous.
00:33:58
Speaker
The same applies here.
00:34:00
Speaker
That is, people have ambitions, people have aspirations,
00:34:05
Speaker
explore them, see if you can help them.
00:34:10
Speaker
And then in the third generation, we really kind of expand that circle of finance and the circle of services that financial advisors can do to go straight to what matters most, which is life well-being.
00:34:24
Speaker
And now you can talk about life well-being as a portfolio.
00:34:29
Speaker
There's financial advisors, of course, no portfolios.
00:34:32
Speaker
The portfolio
00:34:34
Speaker
of life well-being includes finances, it includes family, it includes children, it includes health and so on.
00:34:43
Speaker
Not everything can be perfect.
00:34:46
Speaker
Not every stock in your portfolio is going to go up.
00:34:50
Speaker
But what you learn to do and what you try to teach your clients is to look at the portfolio as a whole.
00:34:58
Speaker
Yes, international stock stunk for the last 10 years or more, but diversification is still important because you don't really know what comes next.
00:35:10
Speaker
Yes, you have a disabled child.
00:35:14
Speaker
What are the things that compensate for it?
00:35:16
Speaker
Well, if you have enough wealth, then at least you can help the child without constraining your own budget.
00:35:24
Speaker
And
00:35:26
Speaker
What are other things, whether it's religion or education or other things that compensate for those areas that are not perfect?
00:35:36
Speaker
You cannot make everything perfect, but you can compensate for what is not perfect.
00:35:43
Speaker
And so again, really the most important thing for advisors to take out of my book and share with their clients is that
00:35:54
Speaker
I am here as a well-being advisor.
00:35:59
Speaker
I know and I teach you the science of finance.
00:36:03
Speaker
You expect that.
00:36:04
Speaker
But I do more than that.
00:36:06
Speaker
I cross the boundary to life.
00:36:09
Speaker
I care about you as a person.
00:36:11
Speaker
And I will do my very best to enhance not just your financial well-being, but also your life well-being.
00:36:20
Speaker
Great.
00:36:20
Speaker
Well said.
00:36:21
Speaker
Well said.
00:36:22
Speaker
Yeah, thanks, Meyer.
00:36:23
Speaker
I appreciate that.
00:36:24
Speaker
Well, we hope you enjoyed today's conversation.
00:36:27
Speaker
If you like what you heard, please take a moment, wherever you're getting this podcast, to subscribe, like, follow us on social media, all those great things.
00:36:36
Speaker
And Meyer, thanks for joining us.
00:36:39
Speaker
Oh, I'm delighted to be with the two of you.
00:36:42
Speaker
Well, Mayor, I want to also extend my thanks.
00:36:46
Speaker
Very enlightening.
00:36:47
Speaker
I want to call it a crusade that I've been on personally for a number of years.
00:36:52
Speaker
I think we're completely aligned in all of our thinking.
00:36:56
Speaker
And what you've pointed out is so important for advisors to remember is that...
00:37:01
Speaker
don't do for clients what they can do on their own.
00:37:04
Speaker
And what they can't do on their own is really identify what matters most to them.
00:37:10
Speaker
And your help as an advisor can really make that difference.
00:37:12
Speaker
So thank you for joining us.
00:37:14
Speaker
And to our listeners, I thank you as well.
00:37:15
Speaker
Listen and watch for our next episode where we'll bring even more insights and actionable ideas to help you grow your business.
00:37:22
Speaker
And remember, the challenge is yours to capitalize on what the future offers.
00:37:30
Speaker
If you want to join the conversation or connect with us, please visit us at synergizedpodcast.com.
00:37:37
Speaker
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00:37:40
Speaker
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00:37:48
Speaker
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00:37:57
Speaker
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00:38:00
Speaker
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Speaker
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00:38:08
Speaker
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00:38:09
Speaker
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00:38:16
Speaker
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00:38:20
Speaker
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Speaker
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00:38:27
Speaker
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00:38:33
Speaker
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00:38:36
Speaker
For a transcript of this episode with sources, visit synergizedpodcast.com.