Four Closings for Financial Advisors

When it comes to financial products, people hesitate even when the proposal is good for them.  It is a reasonable sort of caution, with reports of an uncertain market, scams, or simply bad service.  In the pursuit of what is good for them, people are wary of making a substantial commitment towards what may not necessarily be good for them.

The most difficult client for any financial advisor is the client who is highly educated in an unrelated field, but imagines he or she understands finance due to that high education.  Another subset is the client who has experience in some field of the finance industry, and extrapolates that experience into what he believes is relevant knowledge in insurance, which is risk mitigation and management.  All this is especially so for the mass affluent, and the high-net-worth client base.

Some clients are linear thinkers.  These are the process engineers, the IT professionals, the line managers – anybody in a profession that requires an understanding of a process to arrive at a conclusion from established facts, and copious data.  The problem here is that investing is not just about the apparent conclusions we derive from data, but also the feel of the market, and taking a position to take advantage, or mitigate it.  Investing involves dealing with the market, and the market is moved by sentiment.  The market is people, and people are often not rational.

When it comes to such people, the financial health review is the single most important document.  The FHR is the basis for a comprehensive proposal that explains the role of the product within the portfolio, the asset allocation process, the relationship with the client’s risk tolerance, and the proposed investment horizon for each product and asset class.  This may mean preparing one or two alternative proposals, because clients like this want options.  Just as their job requires a specific process, they want to be part of that process before they arrive at their decision, and they want their options to have that sense of control.  However, once people like this have committed, they see it through.  It is important, however, to give them annual updates, and when the market has significant movement.

Some clients are creative thinkers, the opposite.  These are the people who likely work in advertising, the entertainment industry, interior design – anything that involves a creative process to come up with products, and ideas.  The contention here is that investing is a science, as much as it involves understanding the psychology of the market.  When addressing such clients, it would be best not to inundate them with data, since they would likely switch off.

When it comes to this category of people, it is important to sell them a story.  You have to paint a visually enriching scenario, illustrating the point in a way they can relate to.  Telling him that the mean age of mortality is 88 years, and the age of retirement is 65 years, does not get the point across.  Giving him a scenario where his lifestyle standard is affected, and how it impacts his quality of life, with vivid examples, is far more effective.  This means you need to focus on his needs, his aspirations, and his dreams in the fact find, more than where he is now.  Whatever plan proposed must address the needs in the future in a manner that is subscribable and relatable from a sensate perspective. It is not about data-driven proposals, but one compelling narrative to illustrate the proposal.  Once they have bought into that vision, they tend to be committed over an extended period.

Some clients are complacent due to their preparations.  This would be most high-net-worth clients, and prospects.  They have assets in stocks, bonds, perhaps some insurance plans, and even another property.  They look at what they have, and project a linear growth without considering that their assets have a cost, liquidity issues, or currency exposure.  Many of these people are young professionals, such as doctors, lawyers, or owners of modest businesses.  They built themselves up based on their professional knowledge, and are convinced they know better.

It is important to perform a proper fact find that focuses on the current quality of life, and expected quality of life.  If these people want to maintain some semblance of the standards they are sued to, then they will often find themselves woefully inadequate in their estate and financial planning.  It is important to highlight to these people that not making a move is itself a risk, since it is predicated on the market maintaining itself ceteris paribus.  That is not going to happen.  Medical inflation alone is in double digits  Often, it is critical illness, and poor asset allocation, that affects them negatively, in the long run.  Once they have committed, much of that relationship is about keeping them focused on their own investment goals, every time there is some short-term turbulence in the market.

The final category of high-net-worth client is the over-cautious one.  They were likely, as is often the case, once someone with a high-risk tolerance.  They probably put significant sums in the market, or some form of multi-level marketing scheme, and treated investment more like speculation and gambling.  Inevitably, they got burned, and retreated into financial hermitage.  They are the flip side of the self-made professionals in the above example.

In such a case, it is important to consider the causes of their risk aversion, and address the misconceptions that arose.  For example, not investing, and not mitigating risk, is itself a huge risk.  They need to be appraised of dollar cost averaging, debt instruments such as bonds, and insurance policies – low-risk approaches to mitigate their irrational fear.  With such clients, you have begun a long process of negotiation where you present their needs, and propose a means to address them, and then address every objection they raise.  These are long-term clients, with needs that need to be addressed incrementally over an extended period of time.  They require extensive follow-up, and you need to be proactive in addressing their concerns.

In summary, there are no easy clients.  Once you have identified the trope, some require extensive preparation for closing, whereas others require more work in the follow-up, after the closing.  Ultimately, it is about excellence in service, and market knowledge.

Quora Answer: Why Does Warren Buffett Live Like a Poor Person?

The following is my answer to a Quora question: “Why does Warren Buffett live like a poor person?”

I would like to know where you live, if your definition of a poor person is someone who lives in a multi-storey, 610-square-metre house, with five bedrooms, more than two bathrooms, with a garden, and a swimming pool.  If that is poor, what is your “rich”?

Warren Buffet lives a modest life, relative to his net worth.  That does not mean he lives a poor man’s life.  He has a car, and he can get it replaced without a thought.  He eats well, whenever he wants.  He spends his time with his friends, without concerns about budget, or losing his job.  He is comfortable, not ostentatious.

Quora Answer: Why are Women Exempted from Caning in Singapore, No Matter How Heinous the Crime?

The following is my answer to a Quora question: “If caning, in Singapore, is meant to be a deterrent for severe crime, then how can a woman would be exempted from this even if she has committed a heinous act such as torturing, and killing her children?”

Judicial caning is a British legacy.  The decision to cane men, and not women, is also part of that legacy.  Whilst women are not caned, they have to serve a longer sentence in lieu of that caning, so they do not get a sort of discount on the sense, on account of gender.  That being said, it was the consensus of the age, then, that it would be uncivilised to subject women to the same level of corporal punishment as men, due to their supposed weaker constitution.  In this age, it would be of no benefit to suddenly make caning mandatory for women as well.  We have to consider that due to the differences in physiology, there might be complications in childbirth later.  It would be impractical to institute it, and make provisions based on the specific circumstances of each woman inmate.

Also, we have to consider that the laws must have some level of acceptance in wider society.  Instituting caning for women would be controversial, and create a policy conundrum.  Which government would want to court controversy for the sake of it?  We cannot craft laws based on the heinousness of individual crimes.  The example given carries the death penalty anyway, so that is a moot point.  There is no judicial caning for death row inmates, since there is no rehabilitative benefit.  People sentenced to death are considered beyond rehabilitation.

Quora Answer: If One of Conjoined Twins Commits a Crime, How Would the Criminal Justice System Handle It?

The following is my answer to a Quora question: “If one of the conjoined twins commits a crime, how is that dealt with by the criminal justice system?”

This is an interesting conundrum, and thankfully, it has never occurred, to my knowledge.

Firstly, we must understand that it is establish that conjoined twins are treated as distinct persons.  Each of them has their own legal identification.

Secondly, we must also understand that it is established that while both twins are present in the commission of an offence, mere presence does not make the other party an accessory to the offence.  Their culpability in the commission of the offence must be independently established.

Finally, the real conundrum occurs in the case where a crime is committed that requires a custodial sentence, or even capital punishment. In the former case, it is likely that the state would arrive at some compromise, such as home detention, or probation, of possible.  In the latter case, there would be no execution since the state does not have the legal right to kill an innocent person, and the execution of the guilty twin would result in that.  This is similar to the principle that a pregnant woman is no executed until after birth and nursing.

Paying Attention When Understanding Another Language

The word “attention” is interesting, since how it is used in a language gives us an understanding of how the people who speak that language think.

The word, “attention” is derived from “attend”, and comes into the English language from the Latin “ad” and “tendere”, which collectively mean “to stretch”.  Within the context of English, attention is the act of paying heed, or noticing something.

In English, we “pay attention”.  The implication is that the speaker is valuable, and we have to honour the speaker by paying that attention.  It is a one-sided affair, which points the hierarchial development of that understanding.

Speaking in Spanish, however, you would say, “presta atención”.  “Presta” means to lend, with the cultural implication that giving attention is transactional, and the speaker is obliged to give that attention back.  Therefore, attention that is not returned means the communication of ideas is incomplete.

The French also say “presta atención”, which is a sort of demand, even though it has the same meaning as Spanish.  However, in French, you could also say, “faites attention”, which literally means “to do attention”, since one is not in attention without attendance.  It may be understood philosophically as not only being physically present, which may be superfluous, but to be intellectually and spiritually present. The French really want all of you to listen.  The phrase has an element of caution, meaning that the one spoken to is told to be careful.

The Germans have two phrases.  They say, “Aufmerksamkeit schenken”, when referring to people.  It literally means “to give attention”, since they are bestowing their time on the speaker.  On the other hand, when referring to objects, they might say “Aufmerksam auf etwas verwenden”, which literally means “use attention for something”.

All these four languages are Western European languages.  Spanish and French are Romance languages, derived heavily from Latin.  German is a Germanic language.  English evolved from Germanic dialects, before adopting some French vocabulary after the Norman conquest.  Even in related languages, phrases and the use of verbs differ, which shapes the way native speakers unconsciously think.  Thus, it is one thing to learn a language and understand it technically.  It is an entirely different matter to be able to think like a native speaker, and understand the connotations of the words spoken, at a deeper level.

The Use of "Quite"

The word “quite” is what we call an adverbial modifier, meaning it modifies the verb immediately after it, to create nuance in the meaning.  However, it is used differently in British English, and American English.

In American English, “quite” functions almost like a superlative.  When an American says, “She is quite pretty”, what he means is that she is absolutely gorgeous.

In British English, “quite” functions like a dampener of the verb.  When an Englishman says, “She is quite pretty”, what he means is probably that he is surprised she looks vaguely pleasant.

This essentially sums up the historical relationship between Americans, and the English.  One side of the Atlantic is overwhelmingly enthusiastic.  The other side is mildly amused.

The Paradox of Public Speaking

It is a paradox of sorts, but within the context of Toastmasters, public speaking is not a competition, even though we have speech contests.  It is about being an effective communicator.  It is not about “winning”.  People who win speech contests are not necessarily the best speakers; they were the ones who impressed the judges most, at that time, and were not disqualified.  This is their elevation, and we celebrate their triumphs, and learn from them.  It does not make the others out to be losers, since the experience is itself the reward.  They had the courage to step up, and better themselves.

One of the secrets to crafting a speech that resonates is to understand that while we speak as ourselves, we channel others.  The very nature of rhetoric is to take the pulse of the audience, and put their feelings eloquently in words, in a coherent phrase, in a cogent argument.  A good speaker speaks with passion, and compassion, on issues that matter to others, and make it in their interest to listen.  A good speech is all about the “other”, not us.  The speaker channels the persona of the audience, and voices their concerns, their fears, their triumphs.  He is more than just a speaker then, but a spokesperson, an orator, a rhetorician.

At the same time, it is important that the speaker have his own convictions, and stand by them.  We cannot prostitute our values for the approval of others, and sell our integrity for a fleeting moment of validation.  The good speaker channels the crowd, but according to the prism of his own values.  That may mean arguing for, or against, a position.  It is the subtle understanding that there is a distinct dichotomy between what people want, and what they think they want.  As such, rhetoric is inherently an exercise of leadership, and there is no leadership without some form of moral authority.

A good speaker is known, not just by words, but by values, and action.  This is what the Pathway programme in Toastmasters is about.  One has no authority to speak, if there is no courage to act, and no conviction to believe.  This is that journey of being better than we are, a part of something greater, and not apart.  It is not a sojourn, or a soliloquy.  It is a community.

The Chaos

“The Chaos” is a poem written with the sole purpose of demonstrating irregularities in English spelling and pronunciation.  It was written by Gerard Nolst Trenité, who went by the pseudonym, Charivarius.  It first appeared in an appendix to the author’s 1920 textbook, “Drop Your Foreign Accent: engelsche uitspraakoefeningen”.

“Dearest creature in creation,

Studying English pronunciation,

I will teach you in my verse,

Sounds like corpse, corps, horse and worse.

I will keep you, Susy, busy,

Make your head with heat grow dizzy;

Tear in eye, your dress you’ll tear;

Queer, fair seer, hear my prayer.

Pray, console your loving poet,

Make my coat look new, dear, sew it!

Just compare heart, hear and heard,

Dies and diet, lord and word.

Sword and sward, retain and Britain

(Mind the latter how it’s written).

Made has not the sound of bade,

Say-said, pay-paid, laid but plaid.

Now I surely will not plague you

With such words as vague and ague,

But be careful how you speak,

Say: gush, bush, steak, streak, break, bleak,

Previous, precious, fuchsia, via

Recipe, pipe, studdingsail, choir;

Woven, oven, how and low,

Script, receipt, shoe, poem, toe.

Say, expecting fraud and trickery:

Daughter, laughter and Terpsichore,

Branch, ranch, measles, topsails, aisles,

Missiles, similes, reviles.

Wholly, holly, signal, signing,

Same, examining, but mining,

Scholar, vicar, and cigar,

Solar, mica, war and far.

From ‘desire’: desirable-admirable from ‘admire’,

Lumber, plumber, bier, but brier,

Topsham, brougham, renown, but known,

Knowledge, done, lone, gone, none, tone,

One, anemone, Balmoral,

Kitchen, lichen, laundry, laurel.

Gertrude, German, wind and wind,

Beau, kind, kindred, queue, mankind,

Tortoise, turquoise, chamois leather,

Reading, Reading, heathen, heather.

This phonetic labyrinth

Gives moss, gross, brook, brooch, ninth, plinth.

Have you ever yet endeavoured

To pronounce revered and severed,

Demon, lemon, ghoul, foul, soul,

Peter, petrol and patrol?

Billet does not end like ballet;

Bouquet, wallet, mallet, chalet.

Blood and flood are not like food,

Nor is mould like should and would.

Banquet is not nearly parquet,

Which exactly rhymes with khaki.

Discount, viscount, load and broad,

Toward, to forward, to reward,

Ricocheted and crocheting, croquet?

Right!  Your pronunciation’s okay.

Rounded, wounded, grieve and sieve,

Friend and fiend, alive and live.

Is your r correct in higher?

Keats asserts it rhymes Thalia.

Hugh, but hug, and hood, but hoot,

Buoyant, minute, but minute.

Say abscission with precision,

Now: position and transition;

Would it tally with my rhyme

If I mentioned paradigm?

Twopence, threepence, tease are easy,

But cease, crease, grease and greasy?

Cornice, nice, valise, revise,

Rabies, but lullabies.

Of such puzzling words as nauseous,

Rhyming well with cautious, tortious,

You’ll envelop lists, I hope,

In a linen envelope.

Would you like some more?  You'll have it!

Affidavit, David, davit.

To abjure, to perjure. Sheik

Does not sound like Czech but ache.

Liberty, library, heave and heaven,

Rachel, loch, moustache, eleven.

We say hallowed, but allowed,

People, leopard, towed but vowed.

Mark the difference, moreover,

Between mover, plover, Dover.

Leeches, breeches, wise, precise,

Chalice, but police and lice,

Camel, constable, unstable,

Principle, disciple, label.

Petal, penal, and canal,

Wait, surmise, plait, promise, pal,

Suit, suite, ruin. Circuit, conduit

Rhyme with ‘shirk it’, and ‘beyond it’,

But it is not hard to tell

Why it’s pall, mall, but Pall Mall.

Muscle, muscular, gaol, iron,

Timber, climber, bullion, lion,

Worm and storm, chaise, chaos, chair,

Senator, spectator, mayor,

Ivy, privy, famous; clamour

Has the a of drachm and hammer.

Pussy, hussy and possess,

Desert, but desert, address.

Golf, wolf, countenance, lieutenants

Hoist in lieu of flags left pennants.

Courier, courtier, tomb, bomb, comb,

Cow, but Cowper, some and home.

‘Solder, soldier!  Blood is thicker’,

Quoth he, ‘than liqueur or liquor’,

Making, it is sad but true,

In bravado, much ado.

Stranger does not rhyme with anger,

Neither does devour with clangour.

Pilot, pivot, gaunt, but aunt,

Font, front, wont, want, grand and grant.

Arsenic, specific, scenic,

Relic, rhetoric, hygienic.

Gooseberry, goose, and close, but close,

Paradise, rise, rose, and dose.

Say inveigh, neigh, but inveigle,

Make the latter rhyme with eagle.

Mind!  Meandering but mean,

Valentine and magazine.

And I bet you, dear, a penny,

You say mani-(fold) like many,

Which is wrong.  Say rapier, pier,

Tier (one who ties), but tier.

Arch, archangel; pray, does erring

Rhyme with herring or with stirring?

Prison, bison, treasure trove,

Treason, hover, cover, cove,

Perseverance, severance.  Ribald

Rhymes (but piebald doesn’t) with nibbled.

Phaeton, paean, gnat, ghat, gnaw,

Lien, psychic, shone, bone, pshaw.

Don’t be down, my own, but rough it,

And distinguish buffet, buffet;

Brood, stood, roof, rook, school, wool, boon,

Worcester, Boleyn, to impugn.

Say in sounds correct and sterling

Hearse, hear, hearken, year and yearling.

Evil, devil, mezzotint,

Mind the z!  (A gentle hint.)

Now you need not pay attention

To such sounds as I don’t mention,

Sounds like pores, pause, pours and paws,

Rhyming with the pronoun yours;

Nor are proper names included,

Though I often heard, as you did,

Funny rhymes to unicorn,

Yes, you know them, Vaughan and Strachan.

No, my maiden, coy and comely,

I don’t want to speak of Cholmondeley.

No.  Yet, Froude compared with proud

Is no better than McLeod.

But mind trivial and vial,

Tripod, menial, denial,

Troll and trolley, realm and ream,

Schedule, mischief, schism, and scheme.

Argil, gill, Argyll, gill.  Surely

May be made to rhyme with Raleigh,

But you’re not supposed to say

Piquet rhymes with sobriquet.

Had this invalid invalid

Worthless documents?  How pallid,

How uncouth he, couchant, looked,

When for Portsmouth I had booked!

Zeus, Thebes, Thales, Aphrodite,

Paramour, enamoured, flighty,

Episodes, antipodes,

Acquiesce, and obsequies.

Please don’t monkey with the geyser,

Don’t peel ‘taters with my razor,

Rather say in accents pure:

Nature, stature and mature.

Pious, impious, limb, climb, glumly,

Worsted, worsted, crumbly, dumbly,

Conquer, conquest, vase, phase, fan,

Wan, sedan and artisan.

The ‘th’ will surely trouble you

More than ‘r’, ‘ch’, or ‘w’.

Say then these phonetic gems:

Thomas, thyme, Theresa, Thames.

Thompson, Chatham, Waltham, Streatham,

There are more but I forget ‘em-

Wait!  I’ve got it: Anthony,

Lighten your anxiety.

The archaic word albeit

Does not rhyme with eight-you see it;

With and forthwith, one has voice,

One has not, you make your choice.

Shoes, goes, does.  Now first say: finger;

Then say: singer, ginger, linger.

Real, zeal, mauve, gauze and gauge,

Marriage, foliage, mirage, age,

Hero, heron, query, very,

Parry, tarry fury, bury,

Dost, lost, post, and doth, cloth, loth,

Job, Job, blossom, bosom, oath.

Faugh, oppugnant, keen oppugners,

Bowing, bowing, banjo-tuners

Holm you know, but noes, canoes,

Puisne, truism, use, to use?

Though the difference seems little,

We say actual, but victual,

Seat, sweat, chaste, caste, Leigh, eight, height,

Put, nut, granite, and unite.

Reefer does not rhyme with deafer,

Feoffer does, and zephyr, heifer.

Dull, bull, Geoffrey, George, ate, late,

Hint, pint, senate, but sedate.

Gaelic, Arabic, pacific,

Science, conscience, scientific;

Tour, but our, dour, succour, four,

Gas, alas, and Arkansas.

Say manoeuvre, yacht and vomit,

Next omit, which differs from it

Bona fide, alibi

Gyrate, dowry and awry.

Sea, idea, guinea, area,

Psalm, Maria, but malaria.

Youth, south, southern, cleanse and clean,

Doctrine, turpentine, marine.

Compare alien with Italian,

Dandelion with battalion,

Rally with ally; yea, ye,

Eye, I, ay, aye, whey, key, quay!

Say aver, but ever, fever,

Neither, leisure, skein, receiver.

Never guess-it is not safe,

We say calves, valves, half, but Ralf.

Starry, granary, canary,

Crevice, but device, and eyrie,

Face, but preface, then grimace,

Phlegm, phlegmatic, ass, glass, bass.

Bass, large, target, gin, give, verging,

Ought, oust, joust, and scour, but scourging;

Ear, but earn; and ere and tear

Do not rhyme with here, but heir.

Mind the ‘o’ of off, and often

Which may be pronounced as orphan,

With the sound of saw and sauce;

Also soft, lost, cloth and cross.

Pudding, puddle, putting. Putting?

Yes: at golf it rhymes with shutting.

Respite, spite, consent, resent.

Liable, but Parliament.

Seven is right, but so is even,

Hyphen, roughen, nephew, Stephen,

Monkey, donkey, clerk and jerk,

Asp, grasp, wasp, demesne, cork, work.

A of valour, vapid vapour,

S of news (compare newspaper),

G of gibbet, gibbon, gist,

I of antichrist and grist,

Differ like diverse and divers,

Rivers, strivers, shivers, fivers.

Once, but nonce, toll, doll, but roll,

Polish, Polish, poll and poll.

Pronunciation-think of Psyche!-

Is a paling, stout and spiky.

Won’t it make you lose your wits

Writing groats and saying ‘grits’?

It’s a dark abyss or tunnel

Strewn with stones like rowlock, gunwale,

Islington, and Isle of Wight,

Housewife, verdict and indict.

Don’t you think so, reader, rather,

Saying lather, bather, father?

Finally, which rhymes with enough,

Though, through, bough, cough, hough, sough, tough??

Hiccough has the sound of sup ...

My advice is: GIVE IT UP!”