I learned a lot about financial planning on a recent trip to Iceland. While my wife and I drove around the country, we did things we don’t normally do in the States—we sped like mad and picked up hitchhikers. While the latter worked out terrifically, the former not so much. But both indulgences created translatable learning opportunities.

Since Iceland has twice as many sheep as people and virtually no crime, there is not an extensive Icelandic police force. My wife and I had a condensed time frame for an aggressive itinerary. No cops, no traffic and much to see proved to be too much temptation. Upon our return, I was excitedly sharing my experience with one of my co-workers, who informed me that after his Icelandic adventure, he got a letter from the rental car company with an amount he had to pay for speeding fines caught by camera. My enthusiasm for our experience has been tempered by the sword of Damocles arriving by the USPS indicating the real cost of our trip.

For financial planning, this reminded me that we are always being watched. Everything we say or do is being picked up by clients or staff, interpreted through their lens and organized so it makes sense with their belief system. This is great when our actions and our values are aligned, but is disruptive when they’re not. And seemingly little things can cause big disruptions.

I am now of the age where clients keep asking me how much longer I will be doing this. I suspect that they are not asking because they are excited to hear about my retirement, but because they want to know how it will impact them.
We have three or four staff members in most client meetings, so the question is also of great interest to my co-workers.

Clients probably want me to stick around, but the jury may be out with my co-workers. Some are probably connected to me and worried that if I left, the business would be negatively impacted. Some may feel like I am standing in the way of their advancement. Others may not care one way or the other. My answer is going to impact people in different ways. What I say matters, but my awareness of the impact of what I am saying is more important.

I generally say that I love my client work and I expect to continue it for a long time, but we have a team concept in case something unexpected happens. I also say that my founding partner (Wil Heupel) and I made two key decisions to encourage firm sustainability—we have a no-nepotism policy so that staff doesn’t have to prepare for our children taking over, and we are conducting annual internal sales because we want the next generation to run and own the business. I say that at some point I may not be as valuable setting strategy for the business (Wil is much more responsible for the operations than I am) but that point is probably going to be determined by the other shareholders rather than me, and I need to create an opportunity for them to make that decision without feeling disloyal to me.

Clients usually accept this, but I have to pay close attention to how staff reacts. The answer raises unanswered (and potentially unanswerable questions), like who will run things when Wil and I are gone and what will my role be if I am no longer part of management, but it creates a format from which discussions can evolve.

I also have to take my ego out of things. If I am waiting for staff to tell me how valuable I am, then I am not honoring those who may ultimately question my value. In churches, when a minister retires, a clean cut is made and he or she often leaves the church to create room for new leadership. In our industry, because of client relationships, that generally doesn’t happen. This can make transitions sloppy—especially when founders confuse their relevance as people with their positions. Alternatively, if some staff members don’t want to express my value, then I shouldn’t dismiss them, but engage them.

The hitchhikers we picked up taught us some valuable financial planning lessons. For example, we picked up a young man and woman who were Italian dental school students. The man was an experienced camper and the woman was not. While he was up for the challenge, she said that she had been afraid the entire time—of not getting picked up, of being cold and worrying that she didn’t have the right gear. This is how our conversation applies to planning.

The woman was living her life in advance. Some of her fears would certainly be realized, some would not. She turned the adventure into a march and is missing out on all the experiences in the meantime. When something happens, they will have to deal with it.

I have been sensing fears with clients over the last several months, and these fears have made them feel less secure and more vulnerable—regardless of how much they have. Some are not enjoying the lives they have created and are waiting for the shoe to drop.

When clients feel this way, it is ineffective to bring out the charts and graphs and show them how brilliantly we have prepared them for any inevitability. We can eventually use the analytics, but in order for clients to believe it, we first have to meet them where they are, rather than where we are.

Think about when you have couples with different money profiles. When one partner is anxious, if the other partner is preternaturally calm, that actually makes the anxious partner more nervous. Why? Because he or she feels the need to worry for both of them. We have found that moving toward the anxiousness and opening it up is far more effective than trying to convince them that they don’t need to worry. They will move off their fears, but not until we have walked with them.

One of our newer clients was expressing her fear about needing long-term care and running out of money, in spite of owning an excellent long-term-care policy and only spending a fraction of her portfolio. As we talked through things, we said that we don’t want her to be afraid, but we want to notice when those feelings were surfacing so that we can better understand both the cause of the fear and where it takes her.

Originally, we had been showing her how secure she was, only to discover that she didn’t believe us. Now we can have more relatable and therefore more effective conversations.

The other thing I realized as we picked up various hitchhikers in Iceland is that if I stay open, I can learn from anyone.
We passed a dirty and disheveled couple about whom I had formed an opinion yet for some reason swung around and picked up. They turned out to be a pair of Russian physicists who engaged us in a brilliant discussion about their experiences in St. Petersburg and why they left to find work in other countries.

This incident helped reinforce my feeling that when I close my mind to people who look or think differently from me, then I am not curious. I see this happen frequently in our industry when we react strongly to something we see or hear rather than disagree once we have fully explored the other side. We seek reinforcement of our own beliefs instead of seeing what part of different opinions we can accept and what part we need to reject. Things are rarely all or nothing, but we often are more comfortable in the black or white.

When I open up the envelope from the rental car company telling me how much I owe in fines, I will remember what I learned and view it as the cost of attending a seminar.


Ross Levin is a 35-year veteran in the financial planning profession, a founding partner and CEO of Accredited Investors Wealth Management (www.accredited.com), and the author of Implementing the Wealth Management Index and Spend Your Life Wisely, The Deeper Meaning of Money. His e-mail is [email protected].