by Frank Muller
Psychologists have observed that we as humans often exhibit what is described as the “aspiration treadmill.” This is the tendency in people to not feel incrementally happier as they achieve greater levels of success, compared to those who have less. This lack of incrementally rising levels of satisfaction is rooted in the fact that we adjust our expectations upward as we attain another perceived incremental level of wealth or honor or pleasure or power —thus, the treadmill.
This treadmill mentality has very serious implications for the financial advisory industry when one considers the fact that people continuously increase their portfolio expectations—often chasing nominal performance as part of that mindset. The treadmill way of looking at things also impacts every aspect of a practice from the personal relationship experience and investment management experience to the communication and collateral materials experience. Can we say that we continuously match or slightly exceed an ever-increasing benchmark relating to any performance metric associated with these areas?
So, the rhetorical question is, do we change people to fit our needs, or do we change our practices to accommodate the intrinsic nature of people? I respectfully submit that it is the latter.
What, then, do we do about it and how do we know whether we are incrementally matching the aspiration treadmill?
The first thing we can do is reshape the normal “objective” standards of our practices to align our business tactics with what clients really aspire to achieve in their lives. This is not about hitting a magic number or meeting a certain retirement date.
That isolates the human condition to a less meaningful existence as we know that those artificial objectives actually are not correlated to happiness. We often “say” a thing will make us happen or define an “objective” as our goal but actual happiness is rooted in something far more sublime.
Rather, it may be about defining the passion (or helping clients to define it) that drives us in our universal search for meaning and gratification.
At some point in life, we all begin to wonder how to define the purpose and meaning of our lives. In fact, most great religions are predicated on defining the premise of life’s meaning and purpose and, ultimately, how those connections directly translate into true happiness.
The future of an advisory business is about much more than asset allocation (although that is vitally important). It is rather about our ability to connect people to their money as an expression of their unique life’s meaning and purpose and to begin the process of measuring people’s actual happiness.
What we may help people learn about themselves is that objective achievement is not correlated to happiness. Yes, financial goals are part of a well-ordered life but they in and of themselves do not create happiness.
Deep meaningful relationships, a sense of purpose outside of our own desires, an ability to actually think and feel and to become free from the countless distractions of just “being”.
As people evolve and grow in their search for meaning—in other words, following their treadmills of aspiration—our practices’ alignment with those aspirations must stay intact. When one is linked to the other, a virtuous and self-reinforcing cycle is created.
This further connects with the successive generations as not only do we educate them about the objective needs of wealth management but begin to invest into them that self-knowledge, deep relationships, meaning and purpose are more important than things. When we lead in that discussion, we begin to align ourselves to people’s actual desires and their actual happiness.
As we dismiss the idea of one service standard applying to all, each of our practices will come to reflect an individual client-level experience. In a technological age, this is the thing humans can do that machine’s cannot: create a personal and profound relationship that revolves around the unique meaning of life in the hearts of our clients. Defining portfolio goals in terms of dreams and aspirations—rather than dollars and dates—helps to direct client goals into more cogent targets; ones that radiate long-term satisfaction.
Lastly, for investors reading or listening to this missive – carefully consider the types of conversations you want to have with your advisors whether it be financial, legal, risk management, tax and spiritual. Build a team of people of align with the same search for Truth and meaning and recognize that all are called to serve and be served. Sometimes the greatest gift we can provide our advice givers is to focus them on these important life questions.
Peace be with us all.