Morningstar Advisor - February/March 2012 - (Page 8)

Behavior Gap Make a Difference With Stories, Not Debates By Carl Richards I recently published an article about my own financial mistakes. The story led to some public criticism about my missteps and my decision to talk about them in public. It caused me to reflect on what it means to be engaged in the craft of advice and what we can do to serve the public better. One of the things that surprises me the most about our industry is how quickly we seem to engage in very public debates about the “right” way to deliver advice, charge for our services, and even how we should be regulated. These debates quickly take on a moral tone, with one side laying claim to some sort of high ground, saying that the other is somehow morally wrong. Often these debates are done so publicly that they do far more damage than the issue that started the debate, and it’s all in the name of “protecting the profession.” The ongoing debates about the fiduciary standard, fee-only and fee-based, and in what type of firm someone works are a few of the examples that come to mind. The thing we have to realize is that no one really cares! Outside the industry, these debates make us look like we are more interested in attacking each other than we are in helping the public. I discussed this issue with the editor of a respected industry publication. He commented that as an outside observer these discussions reminded him of a really bad 1980s band that would play with their backs toward the audience, mumbling the lyrics in a way that was indecipherable to anybody but themselves. Navel-gazers, he called them. In a separate exchange, a well-known personal-finance journalist noted that all this debate is fine and good. But in the meantime, he still doesn’t know how to respond to complaints from people close to him about how they can’t find anyone interested in helping them make smart decisions about money. I’m glad that organizations like the CFP Board, Financial Planning Association, and other groups are working hard to set measurable professional standards. It seems to me, however, that the rest of us are spending too much time arguing publicly about things that people outside the industry don’t care about and frankly don’t even understand. If you are an advisor who puts your client first you belong to a secret society. People need you. People want you. The problem is that they either don’t believe that you exist or they have no idea where to find you. So, while our organizations work to elevate the profession, maybe we can take the time that we spend arguing and instead tell our stories. Every time someone has an honest, competent experience with a financial professional, he or she is going to tell someone else, and word will spread. Given the public’s perception of our industry, having a meaningful relationship with a financial advisor is remarkable (meaning, worth remarking about). So, let’s give people more of those experiences. Let’s make the secret society not so secret! K Carl Richards, CFP, believes the world is a better place when people make smarter decisions about their money. That’s just one of the big ideas he promotes at, where he asks tough questions about financial planning and investor behavior. His new book, The Behavior Gap, was published in January. 8 Morningstar Advisor February/March 2012

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2012

Morningstar Advisor - February/March 2012
Letter From the Editor
Make a Difference Stories, Not Debates
How Concerned Are You About Europe?
Analytical and Independent
What to Ask When a Fund Manager Leaves
Past, Present, Future
Have Financials Gotten Cheap Enough?
Four Picks for the Present
Investment Briefs
Tactical Funds Miss Their Chance
Specialty Retail: Ad Hoc Opportunity
How Europe Is Making Its Crisis Worse
Impact on U.S. Economy Will Be Minimal
European Banks: Bargains or Value Traps?
Don’t Count the Euro Out Yet
Europe on the Brink
GoodHaven Realizes Its Vision
How Index Trading Increases Market Vulnerability
Nonlisted REITS: Handle With Care
Safety Picks for the Many Moods of Mr. Market
On the Prowl for Large- Blend Index-Beaters
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
The Math That Matters

Morningstar Advisor - February/March 2012