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Friday, June 21, 2024

Leading and Adapting in a Changing World

Though I try not to let my personal beliefs and practices affect my writing and teaching, in reality, it is impossible. So accepting that reality, and abandoning any resistance, here are some ideas about how to cope and lead in a rapidly changing world.

The financial services and 401(k) industries are changing at a faster pace than ever before not because of internal pressures but because of irresistible societal pressures. Some of these pressures, which I have written about constantly (some might quip “endlessly”) include:

401(k) plans:

  1. More coverage resulting in the explosion of new plans
  2. Working with remote and gig workers
  3. The need (though not the demand yet) for retirement income for defined contribution plans to replace defined benefit plans

Financial planning:

  1. Demand and need for personalization
  2. Inevitable proliferation of AI & ChatGPT while protecting data as well as advances in technology
  3. Convergence of wealth, retirement and benefits at the workplace

How to cope? As we get older and hopefully wiser, we gain knowledge and understanding through experience infinitely greater than book learning. But there is great danger of becoming preachy or “bleeding deacons” because we incorrectly believe we know the truth thinking we have seen everything.

Quoting the over 2,500-year-old Tao, which many have called the wisest book ever written:

Not-knowing is true knowledge.

Presuming to know is a disease.

(Tao 71)

Or put another way:

The more you know,

the less you understand.

(Tao 47)

These are not quaint words—they are truths that the wisest people, who happen to be the best listeners, realize. Always curious, not accepting conventional wisdom, they are grateful, not angry, when someone helps them see they are wrong, a quality that many great academics share.

Do we compartmentalize clients and prospects using easy short-cuts trying to solve problems or close a prospect quickly? Do we avoid attempting to accomplish what has been hard or impossible, like reaching the 97% of participants without an advisor, ignoring that there may be new ideas and solutions available?

Which brings us to another universal truth, one the Buddha uncovered, which is that everything, without exception, in this material world is constantly changing mostly at a pace faster than we realize or want. As George Harrison wrote, “All things must pass.One expert noted:

…one of basic tenets of Buddhism, Anicca, is that our existence is in a constant state of flux and we all must strive to work within the change.  Ideally, we should be able to adjust quickly and successfully change our approaches and practices. Not change for change’s sake. We should make purposeful change.

Do we lean into change or waste energy resisting? Are we willing to adapt, or do we waste time harping about the good old days? Are we resentful about companies and people that lean in and thrive rather than make what can be difficult choices to abandon outdated business models and clients?

Which brings us to leadership. Whether as a plan advisor or individual wealth advisors, our clients look to us as leaders and teachers who are much more valuable than counselors or even fiduciary advisors. The best description of a great leader I have found is in the Tao:

When the Master governs, the people

are hardly aware that he exists.

Next best is a leader who is loved.

Next, one who is feared.

The worst is one who is despised.

…When his work is done,

the people say, “Amazing:

we did it, all by ourselves!”

(Tao 17)

There is a concept that can be an inhibitor to being a great leader and teacher that plagues the financial service industry, especially RPAs, called “the curse of knowledge” described as:

“… a cognitive bias that occurs when an individual, communicating with other individuals, unknowingly assumes that the others have the background to understand.”

This means that you can’t “unknow” or “unlearn” what you know. Once you become an expert on certain subjects, it becomes much harder to explain the basics to someone without that same knowledge.

Some RPAs complain their clients and prosects lack of knowledge, especially the 97%, which makes their job so much harder and frustrating. Regardless of who is at fault, it is the responsibility of leaders and teachers to overcome their own biases and put themselves in the other person’s shoes. Otherwise, real progress becomes impossible.

If we accept we do not know everything, are constantly curious, willing to accept when we are wrong in a constantly changing world and become a compassionate leader or teacher suppressing our egos and putting others first speaking a language they understand, then the societal forces causing the 401(k) and financial services world to change become tailwinds, not headwinds, filling our sails as we pivot, enabling us to succeed beyond our wildest dreams.


Fred Barstein is founder and CEO of TRAU, TPSU and 401kTV.

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