Although I try not to let my personal beliefs and practices influence my writing and teaching, in reality it is impossible. So, accepting this reality and abandoning all resistance, here are some ideas on how to cope and lead in a rapidly changing world.
The financial services and 401(k) industries are changing at a faster pace than ever before, not because of internal pressures, but because of overwhelming societal pressures. Some of these pressures, which I've written about over and over (some might scoff at “infinitely”) include:
401(k) plans:
- More coverage resulting in an explosion of new plans
- Working with remote workers and gigs
- The need (though not yet the requirement) for retirement income for defined contribution plans to replace defined benefit plans
Financial planning:
- Demand and need for customization
- The inevitable spread of AI & ChatGPT protecting data as well as advances in technology
- Convergence of wealth, pension and workplace benefits
How to cope? As we grow older and hopefully wiser, we gain knowledge and understanding through experience infinitely greater than book learning. But there is a great danger of becoming a preacher or “Bloody Deacons” because we mistakenly believe that we know the truth thinking that we have seen everything.
Quoting the over 2,500-year-old Tao, which many have called the wisest book ever written:
Ignorance is true knowledge.
Presumption to know is a disease.
(Tao 71)
Or to put it another way:
The more you know,
the less you understand.
(Tao 47)
These are not strange words – they are truths that the wisest people, who are the best listeners, understand. Always curious, not accepting conventional wisdom, they are grateful, not angry, when someone helps them see that they are wrong, a quality shared by many great academics.
Do we alienate customers and prospects by taking easy shortcuts trying to solve problems or close a prospect quickly? Do we avoid trying to accomplish what has been difficult or impossible, such as reaching 97% of participants without an advisor, ignoring that there may be new ideas and solutions available?
Which brings us to another universal truth, a truth revealed by the Buddha, which is that everything, without exception, in this material world is constantly changing, mostly at a faster rate than we realize or desire. As George Harrison wrote, “All things must pass.” One expert noted:
…one of the fundamental tenets of Buddhism, Anicca, is that our existence is in a constant state of flux and we must all strive to work within change. Ideally, we should be able to adapt quickly and successfully change our approaches and practices. Not change for change's sake. We must make a deliberate change.
Do we lean towards change or waste energy resisting? Are we willing to adapt, or are we wasting time forgetting the good old days? Are we angry at companies and people who lean and thrive instead of making the tough choices to abandon outdated business models and customers?
Which leads us to leadership. Whether as a plan advisor or individual wealth advisor, our clients look to us as leaders and teachers who are far more valuable than advisors or even loyal advisors. The best description of a great leader I have found is in the Tao:
When the Master rules, the people
they are hardly aware that it exists.
The next best thing is a leader who is loved.
Next, the one who is afraid.
The worst is the one who despises.
…When his work is done,
People say: “Amazing:
we did it, all by ourselves!”
(Tao 17)
There is a concept that can be an inhibitor to being a great leader and teacher that plagues the financial services industry, especially RPAs, called “the curse of knowledge” described as:
“… a cognitive bias that occurs when an individual, communicating with other individuals, unconsciously assumes that others have the background to understand.”
This means that you cannot “know” or “unlearn” what you know. Once you become an expert in certain subjects, it becomes much more difficult to explain the basics to someone without the same knowledge.
Some RPAs complain that their clients and prosecutors lack knowledge, especially the 97%, which makes their job much more difficult and frustrating. Regardless of who is at fault, it is the responsibility of leaders and teachers to overcome their own biases and put themselves in the other person's shoes. Otherwise, real progress becomes impossible.
If we accept that we don't know everything, are constantly curious, willing to admit when we're wrong in an ever-changing world, and become a compassionate leader or teacher who suppresses our ego and lets others speak a language they understand first, then the societal forces causing the 401(k) and financial services world to change become tailwinds, not headwinds, filling our sails as we roll, enabling us to succeed beyond our wildest dreams.
Fred Barstein is the founder and CEO of TRAU, TPSU and 401kTV.