Ron Lieber knows value when he sees it. Not intrinsic value, but examination value. In his feature article in today's New York Times, he says good financial advisors have the examination skills of an ace psychologist. I've heard financial advisors called lots of things, but I haven't often heard them called keen observers of minds and money. Lieber rounded up a bunch of planners and advisors who got their starts as psychologists or studied the field as graduate students.
Lest you think I fall into either of those categories let me assure you neither I nor anyone else in my firm started as a psychologist nor studied psychology in graduate school. We have, however, spent hundreds of hours with psychologists, some spent on their couches trying to understand our own quirks and biases, but hundreds more spent with clients, psychologists, and psychiastrists on our couches, though fortunately not all at the same time. Meir Statman taught us how to "make science our ally". From Dan Ariely, we've discovered how hidden forces direct our minds in the making of decisions that are predictably irrational. CFA Institute provides us with a digital library filled with presentations on economics, finance, and behavioral psychology, explained by world-class experts in their fields. We take our calling seriously and have asked more than one client to encounter professional therapy, and our reading room has served as a makeshift emergency room for more than one financial intervention, the most memorable of which included: the client couple, her therapist, his therapist, their accountant, our management team, and their small group. (I'm just glad the fire department didn't pop in that day, checking expiration dates on fire extinguishers and rounding up frayed extension cords, if they had, they would have had to join up with our recovery group (hey what's a few more people?), never mind leaving a fire truck parked on the curb with its flashers on. We look back on that day with fondness and gratitude; each participant shone, contributed magnificently, and on that day, the hero (the husband) and the heroine (the wife) put a stake in the ground, changed the river course for good, and re-wrote the history books of their lives.
Lieber's feature is worth the read. He shows real advisors in a light neither the newspapers nor the talking heads know anything about, maybe because it doesn't sell advertisements. Growing money is a process that doesn't happen overnight, it takes years and decades, not days. Check the article out here.
Most of you reading this post can take comfort in the reality that time on your side is the best insurance policy against volatility and permanent loss of capital. Some of you can't, maybe time isn't on you side. No psychology sheepskins here, just authentic, wise, and caring people, alumni of the bear markets, the emergency room, and the trenches of real life.
If anybody knows of any other articles about financial advisors serving as financial therapists, please leave leave a comment or drop us a line.
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