30th Work Anniversary

The only thing I’ve ever done in my career is concern myself with the defense of families’ financial wellbeing. I’ve given counsel and helped families plan contingencies for occurrences that might interrupt their financial plan. And I’ve been there as a financial first responder when a really bad day happens.

So in my 60,000+ hours of doing just one thing, I’ll share some earned observations:

• Optimism bias is alive & well. My biggest competitor is apathy & the belief that bad stuff happens to other people. No one I’ve known has ever said after a loss, “yup, I saw that coming”.
• There is an overemphasis on insurance and not enough on risk management. Insurance is a product that does nothing for you until after something bad happens. Risk management considers making the bad day not happen or result in less of an impact if it does. Most families and most wealth advisors think good insurance is good enough. It’s not.
• I’ve never once heard after a claim, “that was a good experience.” Investment in prevention is worth way more than the best possible post-loss response.
• Core competency and an interest in addressing risk in the body of a fiduciary engagement (within both in the wealth mgmt and the insurance industries) has diminished.
• People place too much importance on frequency and not enough on severity. We’re drawn to worry about the more common things, and we should instead be drawn to the things that could be most ruinous.
• Families love to learn. The best decisions are made when the full story is told and my best days are when someone says, “Wow, I never knew that. That helps us a ton.”
• Risks are evolving. Trends in losses due to weather, wildfires, cybercrime, reputational attacks, professional liability, libel/slander/defamation mean yesterday’s approaches to wealth defense are outdated.
• More frameworks for addressing the process of risk management are needed. Ad hoc (at best) approaches are outdated. Analytics and formal frameworks based on your specific behaviors will be the future.
• It matters who you listen to. From whom you take advice today magnifies the result of tomorrow.
• There’s a tremendous opportunity for wealth managers and insurance advisors to reinforce the emotional benefits of making investments in behaviors and plans that defend a family’s financial wellbeing. Perhaps that’ll be something for me to tackle over the next 60,000 hours.