I’m fascinated by how the brain works. How it helps us process information, make critical decisions, avoid problems, be outgoing or creative and engage with others. As many of you know, these various functions stem from different sides of the brain and have resulted in a centuries-old argument that people have right-brain or left-brain tendencies—inclinations or personality traits that cause us to act and think a certain way based on the more dominant hemispheres of our brains.
So-called left-brained people are described as logical, analytical and detail-oriented. They tend to be objective and fact-oriented, so they are good at math, engineering and other jobs and careers requiring fact-based thinking. Right-brained people, on the other hand, are thought to be creative, perceptive and intuitive freethinkers. Their perspectives and approaches are more subjective and expressive, so they’re associated with creative jobs and careers.
All very interesting information, but it’s simply not true. The right brain/left brain idea is a myth rooted in old and outdated information. What research actually proves is that even though different sides of the brain are responsible for different tasks, we use both sides equally, meaning logic and creativity are not separate or exclusive.
This myth busting is valuable for the financial services industry, because for decades we have allowed the idea to dominate our industry. For decades we have been trained to believe that the financial focus is more dominant and valuable. That it’s the primary engine to a successful life after work. But nothing could be further from the truth, and it’s time to not only level the playing field but also prepare advisors for the major industry changes coming as a result.
This discussion leads us to one of the biggest voids in traditional retirement planning: The fact that there is no universal definition of a successful retirement. Take a moment to process that. There is no single best way to define a successful retirement.
Now many people will say that a good or strong retirement is one in which the retiree has a financial plan, ample savings and the right asset allocation, has come to a safe withdrawal rate, has collected essential estate planning documents and found the right insurance coverage. Logic suggests that this is a good start. But frankly, if you have all the right financial pieces but are unhealthy, alone and watching TV all day, or if you turn to alcohol or other drugs to deal with your problems, intuition suggests that your retirement won’t feel good or be very meaningful. Which is why it’s so important for professionals as well as financial services firms to realize that the “hard” side needs the “soft” side, and vice versa.
Take a stereotypical couple—one spouse has a penchant for the dollars and cents and the other prefers to focus on filling the social calendar, keeping family close and getting out and experiencing new things.
On paper, this sounds like a perfect match. Each spouse balances the other out. That is, until they meet with their advisor. The spouse who’s focused on the money tends to be considered more important, valuable or dominant in these meetings because that’s what financial advisors have been taught to focus on. The more personal side of the relationship has received little or no discussion and there’s no process to develop a concrete written plan for how the couple will replace their work identities, fill their time, stay relevant and connected, or keep mentally and physically active when they’re in retirement.
That’s been left for clients to figure out on their own. It’s also one of the reasons I feel the number of gray divorces will continue to climb and why more people will fail as they make the transition from work life to home life. It’s a void that professionals can no longer ignore or put on the back burner. Because they are going to start losing clients over it if they do.
I know a couple who recently moved their money away from a large, well-known firm where multiple family members held money and where they got a discounted asset management rate. They left for one simple reason: The spouse who was more interested in non-financial matters didn’t like the way the advisor made her feel, and she often felt left out of the conversation.