The Importance Of Optimism
Evan Simonoff Editor-in-Chief

In late May, I had a conversation with a few financial advisors that reminded me of the importance of optimism.

We were at a meeting in Oak Brook, Ill., sponsored by JP Morgan Fleming, and talking about both the advisory profession and the entrepreneurial spirit in America. It immediately made me think of a conversation I once had with a Swiss money manager who left a giant Swiss bank to start his own asset management shop. He recalled all his colleagues asking, "What will you do when you fail?"

I also thought about all the financial advisors I know who struggled so hard in the late 1980s and early 1990s. Indeed, some of the profession‚s top advisors privately have told me that there were times in those years when they were five months away from personal bankruptcy. Yet they believed they had discovered a better mousetrap to deliver financial advice the right way, and they refused to give up. Today their mousetraps are working overtime as they earn lucrative incomes and love what they do–making a real difference in clients‚ lives.

After all the profession and the world has experienced over the last three years, it‚s easy to get discouraged. But it‚s just as easy, and even more important, to not get discouraged. Financial advisors who project optimism to clients, within the boundaries of reality, are likely to be the most successful.

In the journalism business, reporters and editors are trained to be skeptical, even negative, in their work. To the extent a publication can alert readers to a dangerous problem looming on the horizon, it‚s performing a valuable service.

Financial advisors who can convince clients that they are spending too much and saving too little can transform their lives. Often it‚s the way the message is delivered that is as important as the message itself.

One couldn‚t help being reminded of all this over the past week as the nation remembered Ronald Reagan. The greatest president since World War II learned an awful lot from the 20th century‚s greatest president, Franklin Roosevelt, who was so optimistic that he truly believed he would walk again up to the final months of his life. When one looks at all of the challenges both men faced–be it a depression, a double- or triple-dip recession, a world war or a cold war–overcoming all these challenges probably was not their greatest achievement.

Turning around the nation‚s spirit was. Fear itself was not the only thing to fear in 1933, but as long as that emotion remained so pervasive it was impossible to tackle all the other problems. Reagan‚s predecessor was correct in diagnosing the nationwide malaise that existed in 1979, but we didn‚t need a leader to tell us that we were selfish and apathetic. We needed to be reminded of our best traits as individuals and as a nation. If a leader can do that, the people can do the rest.

As advisors, you can‚t change the direction of the world, but you can help clients change the direction of their lives. That starts with projecting the optimism to make them eager to sacrifice today for a better tomorrow.