Although often mistakenly considered just a “money thing”, real wealth management expands its attention from merely financial capital to include a larger mix of things that contribute to the full scope of a Life Portfolio (I strongly recommend reading The Wealth Creator’s Playbook for an examination of this concept). And for those who value partnership in “growing” their Life Portfolio toward a desired outcome, there are wealth management firms all over the place wanting to help you get there with a financial and wealth management plan.
But what is rare is the dedicated expert who plays the role of defensive coordinator to that plan. What I’m talking about is a person whose sole job is to see where the plan might be specifically at risk, to influence the extent of its impact, to allocate finances toward prevention and recovery, and to direct a crisis toward restoration. It’s rare because although the best opportunity for someone performing that role rests in the intimate relationship people have with their wealth manager, the proclivity of an expert who can do the best job exists in another industry where people get paid for selling a product instead of stewardship.
There are 3 reasons why this needs fixing. First, and sadly, bad days do happen. Optimism bias, which explains how we underestimate our exposure to loss, is a real thing. Understanding our true exposure to risk is important because naiveté and ignorance are not effective or mature. Second, the paradigm of being referred to an insurance agent as the defensive effort is grossly insufficient for reasons I’ve mentioned many times. Insurance is a wonderful financing tool for limited negative experiences, but it provides no avoidance, mitigation, or control and it rarely lives up to expectations. Insurance alone will almost always disappoint. Third, the landscape of modern risks facing families is evolving and expanding. Yesterday’s problems aren’t today’s problems and the glimpses we’re getting of emerging risks is even more complex and severe. So I’m going to bet that whatever process you think you follow to defend your wealth plan today will need some updating.
Our trademark is Less Worry | More Happy so we don’t believe in fear mongering. But we do believe that being intentional and sophisticated about how your plan might be interrupted by an unfortunate event, lawsuit, or an unscrupulous person is rooted in sound values. And in my work with families I’ve yet to find someone who doesn’t feel at least a bit of liberation from worry and more free to pursue all the abundance of their Life Portfolio because they’ve taken a step forward with a defensive component to their plan.