Working For Life

A bit of my history would be useful here. I became a financial advisor in 1998, during the bull market celebrated. Everything was in place, all the clues, every day. There was the story of a monkey picking stocks, and even its choice of actions was winning.

Well, after hearing rave reviews from its customers on how well my skills in financial planning (he had nothing to do with my skills, a rising tide lifts all ships) I got to thinking that stuff I was pretty hot.

Then, the impact of events. And the real work of financial planning has begun.

Before the impact, it is not clear which fund managers and excellent financial advisors have been, because everything was on the rise. If you’ve been invested in the stock market in the late 90’s, you were making money.

After a few demos, we had to actually apply the principles of sound financial planning, and trust they have worked. Some of them and some of them did not. The old rules are rewritten when the markets are shaken.

In any case, one thing I learned throughout the experience was to always manage customer expectations.

Do not allow your customers to have wildly high expectations of any one investment or investment strategy. Conversely, do not allow them to wallow in low expectations of investment that you know are sound, but experiencing a temporary setback.

Manage customer expectations by telling them beforehand what they can expect in the way of volatility. Let them know how rough a particular turn, the investment will be, and then let them make the right choice.

Then, continue to manage customer expectations. Customer forgotten, so the reminder they need.

During their investments rise, continue to manage customer expectations, bringing them a little if you must.

When their investments go down, continue to manage customer expectations and to play if you have to.

Keep your customers happy medium. This is called the Middle Path in Buddhism, and this philosophy applies well as financial advisors. Never be too exuberant (we remember well, Alan Greenspan, telling us that we were on the irrational exuberance of the bull market) and never be under-speakers of your picks though.

The middle path is the key. You keep the middle lane and keep your customers well. So no matter what their investments are, they will sleep well at night. And if they do not, it will not be your fault.