BMN Blog

APR 16

In 2012, I read an article in Fast Company - https://www.fastcompany.com/52717/change-or-die - that made me question much of what I thought I knew about my profession of serving clients as a guide for their financial decisions. The designation following my name for which I had worked so hard at obtaining? Good, but not enough. The incredible technology –from complex financial forecasting to automated investment management? Lacking. 

The article focused on the concept of behavior change, specifically the challenge the medical community has faced for decades in motivating patients to alter unhealthy habits. And the behaviors referenced were glaringly detrimental: smoking, overeating and obesity, excessive alcohol consumption and lack of exercise.

Brace yourself for some large U.S. medical spending numbers, ones that even those that deal with numbers or healthcare every day struggle to grasp: $190 billion spent on medical costs related to obesity1,, $170 billion for direct medical care for adults due to smoking2, $131 billion of spending associated with inadequate levels of physical activity3, and $249 billion spent in 2010 due to excessive alcohol consumption4.

The dollar amounts are huge. People must not fully grasp the harm they are doing, right? It must simply reflect an enormous sample size with the mentality of “it will never happen to me.” That was my first thought back in 2012, but it was quickly squashed as I read the amazing statistic that, of the 600,000 bypass surgery patients each year, only about 10 percent make a lifestyle change afterward. That is mind boggling for many, as it was for me. Why do so many Americans participate in activities they know are working in opposition to their health? And when those decisions literally lead them to death’s door, why do they not change their lifestyle?

Change is hard.

The parallel in behavior patterns in my own field of financial planning was glaring. That fancy technology and software I had (and still do) did the job of an X-ray and MRI at analyzing a client’s financial health. My knowledge, research and experience made it clear what course of action to prescribe. Just as a patient needed to change to avoid serious health problems or death, so clients needed to change financial behavior to better their lives and to avoid financial ruin. And my clients, just like a physician’s patients, were paying me and trusting me for my analysis, diagnosis and help. So why, in many cases, were clients not following through on recommendations? What was the secret to motivating a client to follow a recommendation?

The secret, as it turns out, is this: fear is a powerful motivator…but not the most powerful. That distinction is found in a surprising place:

Joy.

And, when I considered the dichotomy of the two, fear versus joy, it made perfect sense. Without a vision for the future, one that paints a picture of a life worth living, the likelihood of a change is slim at best. My warnings to clients of “depleting your financial assets” (code for “spending all your money too fast”) were akin to a physician’s warning of dying as a result of unhealthy behaviors. But, what if change allowed you to do more of what you enjoy? Travel. Play in the backyard with your kids…or grandkids. Those are goals that just may make saving a little more, or exercising a little more, seem suddenly appealing.

Ultimately, I took to heart that our motivation to change is rooted more in emotional reasons than factual ones.

So began my realization that spending time having a client describe their ideal vision of a joyful future (from a better work/life balance now to a fulfilled retirement in the future) is time well spent. What does retirement look like? What does it feel like to be there? Having a person describe that ideal day, week or month of retirement allows a person to see it in his/her mind and create a vision worthy of the changes or sacrifices necessary to get there.

So it seems the same secret that lies at the heart of a doctor helping a patient enact change also lies at the core of a great advisor-client relationship. Maybe you have a financial advisor, but your personal finance conversations have been less personal and more finance. A mentor of mine liked to say that everyone deserves to have someone to talk to about life and money. If you don’t have that someone… find that someone. Your financial life may not depend on it, but your financial happiness likely does

1 Cawley J, Meyerhoefer C. The medical care costs of obesity: an instrumental variables approach. Journal of Health Economics. 31(1):219-230. 2012.

2 Xu X, Bishop EE, Kennedy SM, Simpson SA, Pechacek TF. Annual Healthcare Spending Attributable to Cigarette Smoking: An Update. American Journal of Preventive Medicine 2014;48(3):326–33 [accessed 2017 Nov 6].

3 https://www.cdc.gov/nccdphp/dnpao/docs/carlson-physical-activity-and-healthcare-expenditures-final-508tagged.pdf

4 http://www.ajpmonline.org/article/S0749-3797%2815%2900354-2/abstract

 


Jonathan Millican, CFP® is a is a registered financial adviser with Bridgeworth LLC in Birmingham, where he also serves as Director of Planning.                                                  

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