Stacey Andres
Jon Gay

TRANSCRIPT

Jag: Welcome to our weekly podcast, The Art of Wealth Unbroken. We provide our listeners with insights improvement, strategies to protect the wealth they’ve built against poor financial planning, investment mistakes, global and national economic conditions, and governmental policies. We discuss the topics in finance, retirement and politics that are on your mind, giving you certainty in uncertain times.

These discussions can help you make better informed decisions so you can make better financial choices with the wealth you’ve built and are continuing to grow. Our hosts are Stacey Andres, registered financial consultant and Michael Wallen certified financial planner. I’m Jon JAG Gay. And for our topic today, we’re talking about seeking answers to better questions to reduce anxiety.

Hello, Stacey and Mike. 

Michael: Hello JAG. Hello Stacey. How are y’all today? 

Stacey: Very good, Mike. 

Jag: Good. 

Michael: Well today’s show comes to us from a article published by Michael Kitce’s team. Titled “Questions, Not Answers. Conversations for Advisors to Navigate Clients’ Anxiety Around Change.” And this article came out on May 4th, 2022.

And the article really is stating an environment in which many of our listeners I believe would relate to. So if I give a little bit of pretext to this. Investors, whether you’re working with a professional or you’re not working with a professional, we are all bound to experience stressful conditions that can impact our finances.

At some point, during that relationship one of the things that Stacey and I have been talking to many of our clients about is undiversifiable risk, and undiversifiable risk really incorporates three areas. War, interest rates, and recession. And unfortunately we have the trifecta of that going on right now. 

Jag: That’s slot machine’s coming up all sevens right now! 

Michael: All sevens. So when you’re looking at the things that as an investment advisor and you can’t help a client to diversify out of, or to be able to avoid a contraction in the market because of those, we are seeing those elements right now. And so, I believe everybody is filling this same impact. And I believe that many of our show followers would say that the current market downturns, whether it’s through the geopolitical shocks as well as many of the potential external factors, have made them very nervous about the current financial situation.

What’s more, those individuals, those clients, those investors are creating stories, narratives in their own mind about what is happening today. And that can lead those individuals into making decisions that are negatively compounded from the initial impact of an event. A contraction in the market.

Supply chain problems that we’re all experiencing today, those type of situations can be compounded in an investor’s own mind. And cause ’em to make even worse decisions such as “I need to sell all of my stocks now, before the market drops any further”. And we have heard many clients say that, but that may not be the best solution.

Stacey: You’re right. Mike, it seems that for worried clients, advisors are often a sounding board for their stories, for their concerns. And it really puts the advisor in a unique situation to weather the storm with them and helping them through their emotional challenges and staying on course for the financial plans that we have helped them structure and put in place. Advisors naturally strive to help and offer expert guidance to their clients.

But sometimes as you and I both know when you only address the technical intricacies of a client’s plan, it is not always the most beneficial and helpful. We can remind a client that is panicking during a market downturn, that they have a diversified portfolio that the money managers that we’re using and that corrections like we’re going to experience are just a regular part of market cycles. We can tell ’em that they need to live through that and just kind of suck it up, which a lot of advisors tell their clients. But that doesn’t help alleviate their anxiety and the stress that they’re experiencing when they see that their accounts are down. The article advises, encouraging a client to really form a new narrative. And instead of addressing just their stressors, helping them understand and implement just a different perspective.

So it might make it easier for them to address the challenges and the situations that they find themselves in which may help them be more successful. Not panic as much when we’re going through a market correction like we’re facing right now.

Jag: That kind of makes sense. Stacey, talking about a reframing. What does that old saying? 90% of the things we worry about actually never happen? 

Michael: Yeah. The problem JAG is remembering that tidbit of wisdom. During those moments that challenges come about, and if we embrace what Stacey is saying, then the investor can become their own expert. They can help facilitate themselves through this process as they’re working with their financial professional in one way the client can become the expert is to take an active role.

And this is one thing that Stacey and I are always sharing with our clients take an active role, do not be passive. When it comes to your financial plan and help them be able to frame certain questions that can help, ’em go through these difficult times as they’re becoming an expert. And we say, well, if you were the advisor, what would you tell your best friend, if they ask you about investing for and through retirement, mostly in these down cycles of the market.

Now what this strategy can lead the client to do, is expand their narrative. By serving as an outside advisor to themselves. Again, a lot of times we have to play head games with ourself to get ourself out of that funk or get ourself out of negative thinking that often comes along. And to potentially accept new ideas that we may already know those ideas, but we’re just resisted at this time to acknowledge them.

Stacey: Many of our followers can probably think back on a time when they have been in a discussion with a family member, maybe a friend, and they’ve shared advice on how they have approached retirement planning in the past. They’re often willing to remind a friend that having a well diversified portfolio is a good way to manage market risk.

But that same advice is often lost on themselves as they themselves watch their own portfolio. Maybe go down in value when we’re going through a time like we are right now. And at the same time, clients are likely to respond to a friend with more kindness and empathy versus the negative self-talk. That they present to themselves.

Thus going through this exercise can calm and empower the client by revealing a more compassionate and relatable response that they come up with for themselves. 

Jag: I’ve seen a lot of stuff like this online, lately, Stacey, where it talks about negative self-talk. And why would you put up with somebody saying these horrible things to you that you’re saying to yourselves and the same holds true when it comes to managing your monies.

I can see how this exercise would be beneficial for all parties involved. It really is empowering to the client, but it also gives valuable insight to the financial professionals into productive ways that that client might wanna respond to the situation. 

Stacey: JAG, that’s great insight. The key point really is that look to find ways that they can change their own stories, that they can expand how they see themselves and really better understand that they can change their role in the story. 

Jag: After the break, we’ll come back and discuss where asking better questions and changing our own narrative can drive us to achieving our own long range goals. 

At Optivise Advisory Services, they combine the expertise of their seasoned professionals in the financial planning, tax, legal, and investment areas to assist their clients in achieving the lifestyle they’ve always dreamed of. Through their proprietary info right system, they address each of the 10 pillars in their planning process: investment, retirement, income tax, social security, education, healthcare, personal care, charitable, legal, and wealth transfer.

Their comprehensive approach brings certainty in uncertain times. To receive your free Arc of Life report, you can visit the website artofwealthunbroken.com or call (855) 378-1806. Website and phone number will be in our show notes. Artofwealthunbroken.com or (855) 378-1806. The Arc of Life report will show you how each of the 10 pillars in the info right process connects together to form your unique personal financial canvas.

Michael: This article authored by Megan Lurtz. She has a PhD in the financial planning society. She also really looks at financial therapy and she has really brought this concept to the forefront during these times of change. The world is in a constant state of unpredictable change and the things that happen too, and around us, both good and bad, can sometimes send us into an emotional tailspin that can make it hard to see things.

Clearly we’ve talked several clients lately. They get themselves caught up in what my dad would say, you bird nested, the reel we’d go out and we’d be fishing and you’d cast out. And you would bird nest that reel. It takes a long time to get out of that. Well, oftentimes clients are coming in and they’re doing the exact same thing.

They’ve just got themselves in what is often called a tizzy and what our goal is, is to help them change their narrative, the story that they have created in their own minds, which often leads to better solutions through difficult times. Just because there is a way of doing things that we have always done in the past, does not mean that that is the same approach that we need to take in the future, to get the same results that we had in the past. For instance, I was talking to a client and Stacey and I have talked about the way we approach use of algorithms or tactical management, and one client asked me the other day, why is it different this time than it was in 2020?

Why is the effect of going “risk off” different for you guys than what I experienced in 2020? Well, the answer is this environment is much different. When you have inflation running nine plus percent and other items that we may be purchasing at over 20%, a risk off position to a cash or cash equivalent position is locking in losses and locking in loss of buying power.

So oftentimes we have to look at difficult times. Frame it in the environment that it is today and change the way that we approach those difficult times. With the current environment. 

Stacey: We all get stuck at times with self doubt. I don’t think it’s something that we can avoid. And when that happens, we find ourselves using some very, very familiar narratives.

Say, tell ourselves that you can’t do this. You are too weak. You’re too dumb. You don’t have the strength or the fortitude to continue on and make it through this storm. And that creates a lot of negativity. 

Jag: Yeah. It’s kind of the opposite of Stewart Smalley. If you remember that old Saturday Night Live sketch where you’re good enough, you’re smart enough.

He’s looking in the mirror. This is kind of the opposite. Narratives like that can really be demoralizing and defeating. 

Stacey: Absolutely because what they do is they reinforce a sense of helplessness and take away from our self worth. There can also be quite a lot of shame that it’s associated with that type of talk.

And so it’s important, not just clients, but for individuals to be able to find a way. To have a different perspective, paint a different picture of what’s going on. And with that forming a new narrative and it can be extremely powerful because new narratives, or maybe it’s just a simple expansion of the current version of our current narrative, but it can help us identify new stories that really help us understand how to address challenging situations in different and often, really more successful ways. 

Michael: This article really made me think back on many of the surveys that we have seen over the years that have been conducted. They conclude that individuals worry more about running out of money during retirement than they do about dying to have a happy retirement. One needs to eliminate the fears and the narratives and be empowered with the plan that is designed to provide ’em the highest. Probability for success during their retirement years, 

Stacey: I’m gonna list out just a few steps that may help our clients and our listeners in this process. First one is work with a financial professional that is more interested in listening than talking. Often advisors like to hear themselves talk.

Number two is be proactive in your financial plan. As Mike addressed earlier, don’t sit on the sidelines. Number three is ask yourself narrative changing questions. And this is something that we can assist you in forming that new narrative use resources such as Monte Carlo simulations, or other technological tools that can run probability scenarios.

Number five, expect that the market is going to go through normal cycles. This is something that you can avoid. Number six, know the difference between diversification and allocation. Number seven, measure and monitor what really matters. And number eight, finally, meet periodically with your financial professional to make changes when necessary. 

Michael: The world can be a very chaotic place. And given current events and economic trends, many investors today are feeling quite anxious with many what ifs or doomsday worry. Advisors that argue with their clients and, or suggest that the client may be worried for nothing can inadvertently cause shame or even more anxiety on that client. One thing that Stacey and I take approach on is to help our clients help them themselves by encourage in them to find those new perspectives through what is referred to as audience questions.

Using this powerful approach from narrative therapy that Megan has outlined in this article, Stacey and I have been able to help our clients change their own narratives and how they see themselves and how they use these new perspectives to successfully cope with difficult challenges, such as weathering the volatility and the market conditions, or even just making major life changes. I wish we could all be Stuart Smalley. 

Jag: Way to bring it back around at the end, Mike. We’re laughing, but there really is serious aspect to this. We’ve talked about behavioral finance. We’ve talked about this in now, the 24 episodes that we’ve done of this podcast, that finding out what makes clients tick really is so very important to helping them manage their financial future.

You’re not gonna force them behavior change or force ’em to do something they’re not gonna do unless you understand how the client ticks. So if our clients wanna come talk to Stacey and Mike at Optivise about their financial future, behavioral finance, what the market’s going on in 2022, all the stuff you can certainly reach us at our website, artofwealthunbroken.com. 

Again, artofwealthunbroken.com. Or you can give us a call (855) 378-1806. Good stuff as always. Gentlemen, we’ll talk to you next week. 

Stacey: Thank you Jag. Thank you Mike. 

Michael: Thanks Jag. Thanks. Stacey. 

Jag: Investment advisory services are offered through Optivise Advisory services, LLC an SEC registered investment advisor. Optivise only transacts business and states where it is properly licensed or excluded or exempted from registration requirements.