The Art of Learning (Client Adviser Edition)

An associate adviser not too long ago asked me this question:

If you were me as an Associate adviser and came in without a financial background but were working towards a client adviser, what would you do to prepare for the role of a client adviser?

To me, that is the most critical question to me because it tells me a few things about a person. I decided to sit the associate adviser down but what I shared is less about the finance or much to do with the business but what I felt is most important:

The art of learning something.

If most of us financial bloggers have a superpower, it will be our ability to learn something we are not trained in. Many of us do not have a finance or economics background but our readers peek into what we said about money because somehow we got better in an area we should not be good at (by academic standards).

The usual spew is that finance is something too broad and important that we should rely on financial advisers.

But I would like to think most of us got sophisticated enough to functionally invest and plan for ourselves.

This same associate adviser sent me this Harvard Business Review article that succinctly explained what I tried to explain to him in 1.5 hours.

Learning to Learn by Erika Anderson.

I think it is a good article and you should read it if you find that learning something that you are not good at is important to you.

Or you wish to find out why some of your fxxking co-workers just aren’t motivated to learn but some are so motivated on their craft.

Erika stressed that in this time and age, you not just have to learn but to learn faster than your competitors. This ability to rapidly learn may be the only sustainable competitive advantage.

Based on their experience working with clients, they identified that if you satisfy 4 attributes, you will learn faster. I think this is applicable to personal learning.

The 4 attributes:

1. Aspiration. You want to learn a new skill or you don’t. Do you have ambition and motivation or do you lack them?
2. Self-awareness. What you know and don’t know. What skills do you have and don’t have?
3. Curiosity. What makes us try something until we can do it? Or think about something until we understand it?
4. Vulnerability. Having to ask “dumb”, “I-don’t-know0what-you’re-talking-about” questions. Are you willing to allow yourself to be vulnerable enough to accept that beginner state?

I cannot summarize it better than Erika. To learn well, I do think you need to have these 4 attributes. Not all, but if you have enough of them, you can get better in something.

Let me see what I can pull out from my memory bank about these four attributes.

Aspiration.

I told my colleague Chin Yu something that I observed.

The chasm between being an associate adviser and a client adviser looks huge. I think one big difference is the difference in the degree of responsibility. Ultimately, you are responsible for closing and taking care of the client, versus supporting someone else.

The communication part is huge and important, but an associate adviser will have ample time to practice in pieces as they support the client adviser when meeting clients.

A big piece is the investments part. How well do you know your own investments, your prospect or client’s mental models, fears and hopes around investments, but also what is out there?

To show confidence, you will need to explain things well. Sometimes not answer a question directly, but understand the deeper subconscious question. To be able to do that successfully, you need to know enough investment shit. Some may disagree with me, but it is an area you cannot just depend on your investment department.

The fortunate thing is that they also have enough time to learn this before they need it.

Because if they wait until they really need it, they will end up drinking through a fire hose and that would not be a good experience.

Not too long ago, I notice a phenomenon that perhaps I am in the best position to notice.

Risk coaching is a big deal to me.

As a financial blogger, I would get deep questions from some readers, or a random emailer regarding certain nuanced aspects of investing. Very often, it is more of how I look to mitigate and alleviate certain aspects of market volatility, this fear, that uncertainty.

But the funny thing is… I don’t remember very often being asked about this by our internal staff. Yes, we often get clients worried about uncertainty and volatility, but… I seldom get pulled aside about how an internal staff is supposed to frame market events or some forms of uncertainty.

I wonder why there is such a stark contrast.

The one possibility: Our staff is so well trained to think long-term that they are free from behavioural issues that many of us suffer from, and they are able to unpack how to look at these market events, and uncertainty so well.

My biased take: The readers that I encounter outside have more motivation to make sure that they get their wealth building right.

In other words, they have more things on the line.

In everyone’s mind, they always have a default packing order of what they deem to be the best strategy to build wealth.

For most people its like this:

1. Getting a good income from work or their business
2. Investing Strategy 1
3. Investing Strategy 2
4. Investing Strategy 3
5. Investing Strategy 4

If I tell you about the virtues of investing strategy 3, how to me that is the holy grail of investing, you may just hear and then don’t take it seriously. That is because, in your mind, those wealth-building strategy in the top 2 or top slot is the most important.

These people won’t go deep into understanding some of these strategies.

If they lose big time in an investment, they will think: “That sucks, but don’t worry, I have my good income and savings rate to make up for it.”

But the game changes when a person realizes their cushy job is no longer cushy. Or that all jobs are shit and they cannot take the lousy industry. They yearn for a wealth machine to provide them with residual cash flow so that they don’t have to work.

This is how many of us pursuing financial independence think:

1. Best Wealth Machine
2. Secondary Wealth Machine
3. Income from work
4. Investing Strategy A
5. Investing Strategy B

If this is your order, the motivation to find the best wealth machine, and why its the best wealth machine is so great.

I have so many questions about different kinds of investment strategies because, in my mind, work income NEVER occupied the top space. I often think of the work income as something that you can never depend upon and that gives a great motivation to get investing right.

There are some questions that I ponder about or there are some investment risk coaching slides that I identify strongly with.

I only have a couple of staff asked me to explain them more.

Interestingly, it’s always the three same staff.

One staff would ask me: “I was wondering if anyone could give greater clarity on just how much is these factor premiums we are talking about whenever we hear Dimensional talk about these premiums?”

The same staff also asked me to clarify what Lubos Pastor shared about future expected returns of stocks being more uncertain instead of less uncertain as the time horizon lengthens. What Lubos say goes against conventional wisdom.

The staff admitted to me that numbers are not the person’s strong suit but regardless, the staff is interested enough to read Lubos Pastor’s research paper regarding this.

If you ask me, all three staff has something in common. Perhaps more common with the readers that asked me these financial questions.

You will be less of a truth-seeker if you lack motivation.

Self-Awareness

I would like to think unless someone has a real problem, they would have enough self-awareness of what they know or don’t know.

I had a few sit down and do quiet research episodes because, over time, I realize that there are some things that are important, may impact my life or work enough, and that I don’t have a good idea how to think through some stuff.

I am a busy person and I cannot think about everything all at once.

The changes to the Singapore medical shield plans to break it down to approved, non-approved cancer drug lists, and cancer drug services fall into this area. As I listen to the internal training, I know that even if I paid full attention during the training, I won’t be able to internalize it because my mind is pre-occupied with other work shit.

So I had to take out some personal time, so that I can go through the whole recorded training, and also do up my own notes.

It is not rocket science and you just need to have some quiet time and some deeper questions will come out of it.

Vulnerability & Curiosity

Erika brought up two critical attributes to speed up learning that may not be easy for me to articulate.

You might find that many times, before you develop a strong aspiration to learn things, you need a spark, and usually, it comes from these two.

If we feel that we have “mastered” something, it is easy for us to mentally rest on our laurels.

We will find it difficult to want to relook something.

When I discovered the safe withdrawal rate research, variable withdrawal strategy, I mentally concluded that I knew enough and that I could be financially independent with $550,000 on a variable withdrawal strategy.

Hindsight, I didn’t really fully understand the safe withdrawal rate research back then, and there are flaws to the system that my brain refuses to accept.

The path to be better as a DIY portfolio manager of individual stocks is to be a truthseeker, to be more comfortable that you may be wrong.

I think in order to galvanise something we feel strongly about to develop conviction, we need to be vulnerable enough to invite the possibility we haven’t mastered it mentally.

I felt that it is quite tough for me because my work in the solutions team at Providend requires me to develop a sort of “finish product”, yet at the same time, I cannot have the mindset that the product is in its true final form.

Clients are paying a fee for it in a way, so how can they accept something that may be substandard?

I mediate between these by hoping our advisers frame what I develop this way to the clients:

1. There is a body of research that goes into the solutions, the numbers that go into their plan. This is something many clients have not thought through well enough themselves or need some validation and confirmation. They are paying for it.
2. What Providend put out is serviceable enough to act as a starting point, or near an initial phase, in the path to get them to their life/financial goal. But this might not be in its final form.
3. If your life/financial goal is important enough for you, such that you care more about fulfilling it than anything else, then you would want to work with someone that keeps thinking about the solution to improve upon it.
4. Looking at Providend’s research and solutions as a continuum rather than it always being in its final form is much healthier and more realistic because by and large, many things are not easy.
5. Good solutions require time to stew. There are enough things to consider, and being constrained in the timeframe often leads to a substandard solution that gives a dangerous conclusion. For that, it is always good to spend time earlier before it is needed to pay attention periodically, to have enough mind space to think about it. Basically, think about the problem and possible solutions before you actually need to deliver it.

Erika helped a professional develop motivation to learn by reframing questions with curiosity.

Some people are just more curious than others.

There are people who are more thinkers out there and they have an advantage over us because, if they cannot understand or see the solution around a problem, even if it is a problem they are less motivated about, they cannot sleep well at night.

I have enough of these portion of my make-up that I am a thinker. But there are people in the company with a huge proportion of their make-up being thinkers.

They will always seek me out to validate if how they think is correct.

They won’t just readily accept the stuff that I presented in a training.

Motivation is an important part of learning but being uncomfortable with not knowing the true answer is also an important element and some of you may have that more.

Erika show us that if we spend more time asking curious questions, that might ignite the learning process.

Mental & Time Management

I will volunteer in an area that Erika didn’t talk about.

Aspiration, Self-awareness, Vulnerability and curiosity can ignite learning… but to learn you need to make space for it.

There are some parents from other culture that are less academic focus because they believe it is more important for the kid to have enough space to freely think about things.

There is a reason why Kyith can ponder so much about some of this stuff.

It is because for most part he works in operations where problems are quite well-defined, single and don’t have hard family problems to contend with.

If you are a very busy person, you got to make headspace for it.

I don’t think it is as difficult as you think.

You just have to be very focused.

When I felt that I need to be better in some of the finance stuff when I first come to Providend, I just unsubscribe to a lot of those financial independence podcasts and listen more to those about the kind of investing we do. It is the focus.

Aside from family, work commitments, the spare time you do devote to this.

The headspace you spend shows your commitment and motivation.

Conclusion

I came into a wealth advisory firm without formal financial training.

Certain formal financial training such as basic accounting, basic finance is important to build a foundation.

But what I learn the most is

1. Becoming invested enough, being very motivated to seek out the truth.
2. Question things enough, to disprove things until they cannot really be disprove anymore.
3. Spending enough headspace thinking about something.
4. Be uncomfortable enough that what I have already may not be it’s true final form.
5. Talking to a lot of people, reading a lot to disprove things, to address burning questions.

Sometimes, people don’t understand that partly what they are paying for is the time and space we spend thinking and revisiting things that they cannot.

It is not just about “how come this portfolio looks like any portfolio out there?”

It is about “how come A, B, C, X, Y, Z is not added to the portfolio! What is the decision behind that?”

“Why don’t I give you a solution that enables you to spend 6% of your capital for retirement?”

I do think the aspiration and motivation part is a big, big piece in learning.

When I talk to many seemingly good DIY portfolio managers of individual stocks, they like to discuss certain nuances that is seldom presented in textbooks.

We all understand why these nuances are soooooooo important.

A few days ago, I visited my friends Rusmin and Victor at their new Fifth Person offices. In the conversation, Victor explains to me a novel jigsaw puzzle exercise he use in the Alpha Quadrant webinar to explain something nuance.

It is very, very, very difficult at certain points to tell whether something is an elephant or a cow.

What we want is to buy a great business at a cheap price.

But fundamentally, that doesn’t happen all the time! The times when you feel most comfortable to buy a business with great certainty…. it is not going to be cheap! The price reflects a lot of that information out there. So the time what you want will happen is when things look stupid.

And there are risks:

1. It can show that it is not a great business and degenerate.
2. It is a truly great business and this is the best opportunity.

Some of these concepts won’t be drilled into your head if you just read the textbook. You need enough vested interest and try enough times. It has to be important enough.

Victor and Rusmin don’t want to lose their money. They certainly don’t want their students to lose money.

They have two motivations for learning: Enough vested interest and an aspiration to do right by their students.

My colleague Chin Yu is right in a way.

If you are self-aware, and vulnerable enough that you are not good at something, be it in the area of trust, you should be motivated enough to create some headspace for the month, the next quarter or the whole year to focus solely on that.

Even in your own free time.

The motivation is that you want to be a trusted adviser. If you want to be the head of HR, that might be enough motivation to learn and make yourself more valuable or as valuable as the competition.

What Erika provided are good ways to trigger the learning process.

True motivation to learn comes can easily come from whether your family’s money is important to you to ask seemingly stupid questions or to be surer.

To go far, learning to learn is more important than you think.

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