It’s always been fascinating to me to work in an industry which is so heavily advertised on TV. Maybe I’m biased by my own attention span, but it seems to me that during a typical three-hour televised football game the viewer is subjected to no fewer than 25 commercials for financial services companies. Outside of fast food, I can’t think of any other industry which is so over-messaged.
Of course, as long as we are talking about commercials during football games, we have to acknowledge that the Super Bowl of NFL football is also the Super Bowl of American corporate messaging. Advertising during this biggest of media events pretty much defines the period which it is occurring.
Thinking back, these commercials have spawned the stock trading baby (now apparently making a comeback), the rocket ship investing monkey going to the moon and the tropical-island-owning truck shop driver who apparently bought a small nation with his investing profits.
This year, in case you missed it while going back to the snack table during breaks, the advertising had two trends, which seem in some ways to contradict. As an interested observer, however, the messages were clear, in 2022 the financial services commercials seem to all be either about cryptocurrency or about financial planning. How’s that for dichotomy?
It's hard for me to weigh in on cryptocurrency. While the crypto commercials themselves are super cool and I find the topic extremely fascinating, crypto is way beyond the scope of this column.
Planning, however, is something I understand deeply, which in a way makes me snicker a bit when I see commercials illustrating a financial services firm’s “planning app” as if it is the answer to all a family’s challenges.
So, if planning isn’t actually an app on a smart phone or website, then what is it? Being contemplative, I think I can boil financial planning down to two core concepts: risk and behavior management.
Collectively, we all experience some risks together. The volatility of the stock market, interest rates and inflation, the management of the government, geopolitics. These are the high profile “big” risks that get all the attention and must be navigated to use the financial markets or banking system to help achieve our personal financial objectives.
Due to the lack of direct control over these issues, these risks can be scary and even overwhelming at times. Fortunately, there is support available to help manage these risks. Investment management, financial products, assurance programs like the FDIC and financial regulation all exist to help individuals address system level risk. While these resources may not make the process of enduring systemic risk easier all the time, I believe with instruction and patience history shows us systemic risks can be successfully managed over time.
Right beneath the “big” risks, however, is where planning provides its clearest benefits and solutions. Each family faces unique risks of its own. Employment or business risk, spending and lifestyle risk, comfort level with debt, divorce and family circumstances, managing financial decisions of the past, medical and long-term care risks.
Understanding these challenges, and coaching the behavior and decisions needed to address them is where planning goes beyond an app and a Zoom meeting and into the realm of true value. This is where planning can actually become art form, addressed through experience, insight, and sometimes humor and patience. There are solutions to every planning challenge, sometimes the solutions are obvious but concealed, and sometimes the solutions take time and coached shifts in decision making to solve. Identifying and addressing financial questions, however, is the first step to finding financial peace and ultimately success.
Regardless of what the 20 financial services commercials told me during last night’s IU basketball game, I know that an iPad app has never counseled a family into retirement. This human process is best delivered by human beings, who know and understand each family uniquely. That’s planning in its truest form.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your financial advisor prior to investing. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at firstname.lastname@example.org. Securities and financial planning offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.