Journal of Financial Planning: October 2011
Lewis J. Walker, CFP®, CRC®, is president of Walker Capital Management Corporation and Life Transitions Advisors LLC. He is a founding shareholder of The Strategic Financial Alliance Inc., an independent broker-dealer in Atlanta, Georgia. Walker can be contacted at lewis@lifetransitionsadvisors.com.
Our profession affords marvelous opportunities to attend conferences and hear top-notch speakers, sometimes on topics that at first glance seem tangential to what we do. In the early days of our evolution when much about financial planning was new, the focus was on investment theory—how investments and markets functioned, with a passion for numbers.
As we matured, experiencing the very life transitions that now concern growing numbers of clients, the focus shifted to the business of life. We welcome introspective speakers who take us beyond money, who explain how life works.
At a Hines Real Estate Institute conference in Chicago in May, author, consultant, and former Harvard professor and researcher Shawn Achor explained the thesis for his book The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work. The book presents ideas originally taught in Harvard University’s famed happiness course, and now fueling success at companies worldwide.
Why teach advisers about happiness? The reason is simple, tied directly to the theme of this issue of the Journal: client trust and communication. Adviser happiness is a matter of confidence and leadership.
As an Air Force officer I learned principles of leadership that carried over to post-military business life. As a management trainee at United Airlines, I experienced two training flights during which aircraft were put through a series of maneuvers in response to a simulated systems failure of some kind. One exercise, dubbed “the fright flight,” involved a planeload of flight attendant trainees on a Boeing 727 aircraft.
If an aircraft at high altitude experiences an “explosive decompression” due to a hole or rip in the aircraft skin, the pilot must descend rapidly to a lower altitude. To do so, the plane is rolled to one side, neutralizing all lift. As the nose is pointed down, power is applied to put the aircraft into a steep dive. A B-727 can descend up to 17,000 feet in one minute, a heart-stopping experience beyond anything Six Flags could imagine!
The purpose of such a startling feat is not to scare trainees, although some were so terrified that they washed out of the program. The goal is not just to train them how to react to emergencies but also to instill confidence in the flight and cabin crews relative to the capability of the aircraft and the ability of the crew to handle an emergency and safeguard passengers.
When the objective is to keep passengers calm in the face of a life-threatening situation in which they must be receptive to commands and follow orders, the value of training and leadership kicks in. Witness the “miracle on the Hudson” in which all survived a crash landing in the Hudson River shortly after takeoff into a flock of birds.
When things go wrong in the world and investment markets radiate logic-killing stress, clients look to us for calm, wisdom, and direction. Or the client may be facing a life challenge so stressful that the ability to make good decisions is compromised. Clients must have trust and confidence in our advisory capabilities, which at times we must deliver while under pressure ourselves.
The Third Path and Mind Maps
One-third of the nation—about 100 million Americans—are over age 50. As the youngest baby boomers turn 47 this year while the leading edge of the boomer tsunami reaches age 65, a huge segment of the population is entering a time frame conducive to anxiety-ridden life events.
According to the National Institute of Mental Health, approximately one in four American adults has a diagnosable mental disorder, more than cancer or coronary heart disease. And according to the Mental Health America: Depression in Women index, women are twice as likely as men to experience depression. Regardless of whether a client is depressed or just plain unhappy, procrastination, indecision, or rash emotional decisions are the upshot.
Achor notes that after crisis or adversity, there are three mental paths. One path is the go-nowhere default, the negative event creates no change; you end up where you start. The second path leads to further negative consequences; you are worse off and increasingly afraid of conflict and change. Achor tags the third path as the one “that leads us from failure or setback to a place where we are stronger and more capable than before the fall.”
Finding the third path in challenging times is not easy. “In a crisis, economic or otherwise, we tend to form incomplete mental maps, and ironically, the path we have trouble seeing is often the most positive, productive one,” says Achor. “In fact, when we feel helpless and hopeless, we stop believing such a path even exists—so we don’t even bother to look for it.”
As holistic advisers, we can help clients under stress avoid being crippled by failure or setback and rise above it by visualizing positive alternatives. Often we go way beyond money, beyond left-brained disciplines into the realm of right-brained creativity and imagination, fulfilling excursions into true life planning. Because we are not trained psychologists, medical experts, or spiritual counselors, often we turn to outside consultants as part of a team. We are learning to use new visualization tools such as mind-mapping software. We are the calm member of the client’s flight crew as we chart a new path.
Unhappy people often are overwhelmed by the enormity of a challenge. They cannot see the third path through the tangled forest because there are too many trees. A mind map makes it simple by creating a visual structure, one that gets information in and out of your brain that maps out your ideas. A mind map takes a long list of monotonous information and a catalog of alternatives and resources and diagrams it in a brain-friendly manner. Mind mapping conquers information overload and helps clients and advisers think strategically, visualize tactical details, and make better decisions.
Maria C. Forbes, a team performance consultant in Johns Creek, Georgia, and creator of the FIREPOWER™ Business Catalyst process, uses mind maps in forming family teams to deal with health care and caregiving challenges—an increasing source of stress and unhappiness as people age. “Using mind-mapping software, we can take clients on a tour of their symptoms, needs, and solutions to family challenges,” Forbes explains. “Having identified the client’s validated problem-solving abilities, the software is a live planning tool for plotting the role of each family member.”
Mind mapping helps clients imagine their personal efforts in alignment with the goal as well as comprehend how others on their team will likely take contributing action. “A primary concern in a family crisis is the preservation of relationships,” says Forbes. “When working with family teams, we know that unfamiliar strain results from not knowing who does what, naturally, toward the common goal. Once family members understand their strengths and how to use their abilities as part of the solution, we use the mind map to show clients they have the power to prevent undue frustration.”
For information on mind-mapping technology, visit www.mindgenius.com, www.mindjet.com, and www.matchware.com, or other sources. A mind map enables a client to see the entire financial planning structure and strategy grid at a glance. The evolving information base empowers clients with renewed confidence so they can communicate and navigate challenges as they look ahead to their future. A creative mind map can clearly illustrate the third path.
Regaining Control
Achor notes that loss of control is a major source of unhappiness and depression. When people feel overwhelmed by macro or micro events, they give up, surrender, or do the wrong thing. As advisers, we cannot control investment markets and economic, political, and regulatory events. We, and our clients, can only control our response to such events. In the face of a seemingly insurmountable challenge, our motto should be that of the Apollo 13 crew: “Failure is not an option.”
Achor offers an alphabetized nightmare list of the worst things that can befall us: bereavement, bone marrow transplantation, breast cancer, chronic illness, heart attack, military combat, natural disaster, and physical assault. We might add family problems, major accidents, divorce, career and business reverses, and financial disasters to the list. In what researchers call “adversarial growth,” such events have been found to spur profound, positive growth in many individuals. Some of the most positive things in your life came out of a negative circumstance.
Client trust and confidence is rooted in relationships. Achor’s book details a body of research from the positive psychology movement, which emphasizes instilling resiliency and positive attitudes. When our practices are a challenge, when our life or that of a trusting client is under pressure, we need to understand the secrets to happiness. It isn’t about numbers any longer. It is about positive coping mechanisms and our ability to lead and influence.