Thinking about what the future may bring, and preparing clients for it.
"The future is often oversold and underimagined."- Chris Luebkeman, engineer
Some one-liners just make me think. They contain
that uncertain combination of delightful wisdom and infective mind warp
that keeps it bubbling into my imagination during idle moments.
"Oversold?" "Underimagined? Hmmm.
Since financial planning is nothing if not in the "future" business, the phrase tugs with puzzlement and demands to inquiry. It addresses that ironic divide where the futures we think we want flail longingly from the futures we will most likely get.
This one came courtesy of my wife, Gail, the architect, via Colorado AIA's annual gathering. Mr. Luebkeman is an engineer with Arup Foresight and Innovation in Great Britain with a view toward the histories and promises of the building professions. His research into past projections by engineers and architects shows remarkably consistent tendencies for them to systematically and collectively underestimate the breadth and depth of what was to be. Realities surpassed their visions by much more than a nose. In his speech, Mr. Luebkeman was illustrating the paucity of our collective ability to imagine what will be, even as we so enthusiastically promote what seems so obvious to us now that we even build businesses around it. And this for people who design with the future in mind.
Examples? We all know that Tom Watson predicted that the world could potentially use four computers. And have you seen 1954's pictures of the 2004 personal computer? They dreamed of room-consuming computers with less power than the 4.3 pound beauty currently sitting on my lap.
To bring it home to financial services, for example, could we have imagined this headline 20 years ago?
"BROKEN PROMISES"Front page headline, Rocky Mountain News, December 25, 2004, referring to the U.S. Pension systems.
All this set me thinking about my favorite profession.
Let's look at the words. By definition, "oversold" would seem to mean generating belief notwithstanding the absence of compelling proof of relevance or utility. Synonyms might include "persuade," "influence," "convince" and "sway."
"Underimagined" implies a failure to anticipate, predict or expect. This includes the tangible "bads" and "goods" that will actually transpire, including full ranges of both coincidences and unintended consequences. It all falls within that huge container known as "FutureThink," anticipating that which is yet to be.
It is simply not in the nature of life for any of us to actually know what the future will bring. We can just attempt wild guesses. To do this, we can look at history, follow trends, get a sense of the world around us, grasp our own essences personally and professionally, come to grips with the human condition and proceed to develop some educated thoughts. Along with it, we can also grasp the shortcomings of our planning's possibilities with such instegrity that folks are able to absorb our inherent uncertainties without panic. Life is uncertain, Monte Carlo notwithstanding. Clients ought to be able to absorb that we are just doing the best imagining available to us.
That's something. But what?
Fact is, it does our clients no good to romanticize or demonize what might be coming down the pike. (Overselling) Neither does buoyant optimism or pusillanimous pessimism benefit them overmuch. (Underimagining.) Yet, through these extremes, grasping the possibles and their necessary preparations would seem to be of intrinsic value to all of us. Where is the balance? The insights?
For me, it speaks to the essence of what this profession might/ought to be, except in contrast. When working with people, their money and their choices, it seems to me that the preferred route would be to undersell and overimagine. "Ms. Client, this is what ought to happen with all of these assumptions-except for all that could go wrong between here and there, including, but not necessarily limited to..."
As planners, it seems to me that significant parts of our work are always wild guesses commingled with our best efforts to anticipate what these might be. After all, our clients are asking us to help them make critical decisions that will affect their lives way beyond their own imaginings of the future. People get sick, die, divorce, lose jobs and change their minds and circumstances. All sorts of things interfere in the name of real life that don't necessarily find their way into long-term cash flow analyses.
What might this mean to us from a planning perspective?
Let's think. If we "oversell," especially to the positive, we could end up with some mighty unhappy folks. As my old colleague, Eileen Sharkey, says, "We don't want our clients being 85 years of age, out of money and knowing where we live." On the other hand, regrets are bad. Paths not taken because money fears diverted hopes and dreams are prime sources of regret.
If we underimagine, none of us will be as prepared as we might have been, or have had the opportunity to perceive the full ranges of options and possibilities. Consequently, we might have failed to take the very risks that would enable prosperity and joy. Paradox. That's life.
Let's look at some big ones. For most of us, the huge unknown is our health. Can we help our clients imagine what that might look like? How personal can we get?
Then there are the huge social issues. What sorts of wars will be fought, personally and culturally? What cultural trends are likely to emerge and how will they affect the common wealth? What will be the nature of the demands society will place upon us? Will we get our parents' retirements? What will nature bring upon us? Can we anticipate tsunamis-geological, political, monetary or otherwise?
What would an equivalent mean to our clients? Of course, as we spiral into the unknown, questions and their implications increase geometrically.
Obviously, since we are dealing with the future here, definite answers are highly unlikely. Yet we have inklings, don't we?
For one thing, it means we need to fully understand the ranges of the possible and the natures of our presuppositions re the future. What wisdom and perspectives do we bring into the room? What do we simply assume without question? World order? That the economy is viable? That natural disasters occur elsewhere? That society will be generally orderly? That money as we have come to know it is a natural force? Can we grasp the subjective forces at work within our clients and the social systems in which they participate? And so on, through various iterations. This list is just the literal tip of the proverbial ice berg. How can we prepare?
Next, we can look around, read, listen and move through our world and get some ideas. What have we seen that was previously "oversold" or "underimagined?" Maybe we can look backwards at trends, growth, consumption patterns, world traumas and the like to get a sense of our planet's volatility.
Oversold? The intrinsic worth of big houses and bigger cars? Do McMansions and urban tanks really provide more value or just give us more to clean? The values of college degrees notwithstanding deficiencies in actual learning or social utility? The essentiality of upward mobility for happiness within lives well-lived? "Stuff" in general? The efficacies of fertilizers, economic interventions and gold? Top-down management systems? Miscellaneous alarms? The efficacy of Social Security? The government's abilities to legislate good works? The joys of money freed from William Jennings Bryan's famed "cross of gold."
Underimagined? The impacts of social legislation? Damn those unintended consequences. AIDS? Who could have known it would destroy continents and dreams?Population and overcrowding? Rush hour is just the tip. Advances in weaponry? Yikes!Do you feel more secure? Environmental degradation? Life spans? How do we plan for 40 years of life on unearned income? The implications of mass media? Whew!No mysteries. Also, no privacy. Social engineering? What about those unintended consequences? The consequences of bad manners? Who could have known they would so negatively affect our hearts? The resilience of the human spirit? My goodness.
These are just parts of my very own personal oversold/underimagined lists. There is obviously more, but their completion just might put me across the line on various post-modern political correctness tests.
Maybe we can just take a look around and grasp what seems to be losing vitality. What is breaking as we twiddle our thumbs? School systems? Retirement vehicles? Social service programs? Families? What does it have to do with us?
As I see it, financial planners are among the very few actually working to connect people to their personal futures in any meaningful, fundamental, objective manner. This is a large part of what makes our work so vital and our practitioners so special. Virtually no other professional advisor shares our common practice of working with people in concepts of decades, even centuries, along with the here and now. We ask people to imagine what it might be like to be 80. We ask them to think about what their family will be like in 50 years, as well as encouraging their genuine contemplation as to who it is they want to become during those 50 years. No one else does this. It is a unique aspect of our profession.
Who else? The government? The future is never more than four years away. Doctors? Maybe some of them, not most. Teachers? Possibly, but there are way too few of them working with adults to carry this weight of the future. Preachers? Again, maybe, but they tend to focus on our near futures or eternity. Too bad, because most of our lives will be lived somewhere in between those spaces.
Yes, my friends and colleagues, financial planners are unique in our work with individuals in attempting to reconcile personal, here-and-now choices with uncertain futures. Sometimes I don't know whether to laugh with joy or cry with despair at these implications. I just know they are there.
It's tough to be in an authentic profession these days.
Accordingly, I suggest we need to look at our assumptions and predictions. What might we be "over [selling]" or "under [imagining]?" Obviously, future-oriented financial products require assumptions. What are they? Perhaps less obviously, it includes money itself, as well as the efficacies of the social orders impacted by such money. Since we sell these in anticipation of future benefits, don't we need to ask simple questions like, "What could go wrong?"
How about the "rules" of the game? They are certainly mutable, especially law. Or so-called pillars like Social Security or anticipated pension plans? These are all under fire even as we speak. How should we continue to "sell" them?
"Underimagin[ing]?" Well, again, what could go wrong? And what might we be able to do about it? What will life be like in 40 years? What about expanded life spans? What if the dollar collapses?
And what could go right? Are complementary currencies viable? Could the Middle East democratize? How do we play? And how might we better grasp what the future will actually bring? How can we expand our global understandings? Our insights into individuals and cultures? Our appreciation of history? It also seems to me that we have a lot to learn from related discipline ... and they from us.
The future. "Oversold." "Underimag-ined." Yet our responsibility.
Richard B. Wagner, JD, CFP, is the
principal of WorthLiving LLC, based in Denver. He is the 2003 recipient
of the Financial Planning Association's P. Kemp Fain Jr. Award, which
recognizes a member who has made outstanding contributions to the