By John Markham
As financial planners, we often stress the long-term nature advice to our clients. However, in a world with so many distractions, sticking to the plan is harder than it sounds. Deviating from the plan (trying to second guess markets, panicking and selling at the worst possible time, etc) is commonly referred to as the Behaviour Gap.
The advice may be simple, with a clear, evidence-based long-term benefits, but it doesn't provide something we all crave as humans: instant gratification. What's simple isn't always easy.
This Behaviour Gap is not unique to financial planning. In general, simple, boring fundamentals deliver the most long-term value.
Examples of a few boring, simple (not easy) fundamental things that I would argue would benefit everyone but often get overlooked are:
Why is it so hard to do these simple tasks? Well, maybe because they are BORING. Repetitive, monotonous, and boring. There is no instant gratification.
Do we want to endure 6 months of healthy eating and exercise to see changes in our body and health? At this crossroads, we may be tempted to look for two things: a quick fix (which doesn't exist but many will promise in exchange for our hard earned money) or false reassurance it's not that important and put it at the bottom of the ever-expanding to-do list.
I saw Michelle Hoskins talk at the excellent Humans Under Management conference in London at the end of 2019 and she touched upon some of these themes. It was essentially the ‘Oxygen Mask on First' rule. If you are tired, unhealthy, stressed, and unorganised because you think you are putting your clients first, you are doing both sides of the table a disservice.
Helpful ways to start implementing some changes is not really for me to say, however, James Clear and his book Atomic Habits is a great place to start for anyone wanting to learn how to make small steps to progressing to the better you. Clear writes:
"Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity."
So, let's celebrate the boring things in life. Go get some more sleep, wake up and move, start learning something new and eat something better than you would have yesterday. Your clients, business, family, and future selfwill all thank you in the long term!
John Markham is a Certified Financial Planner, Chartered Wealth Manager and Managing Director of Future Financial Planning.
