By Thomas Twombly

In early November, six middle-aged guys set off on a challenging wilderness adventure that would take us deep into the heart of one of the most remote and inhospitable regions of the United States. We were going to travel by canoe for three days, covering approximately 40 miles of the Rio Grande River as it traced the U.S. border with Mexico, through Mariscal Canyon, one of the most distant and inaccessible sections of Big Bend National Park. All of us were experienced outdoorsmen, but none of us had ever made this trip before, so the sense of anticipation we felt was both energizing and sobering at the same time. We were well-aware that the vast reaches of the Chihuahua Desert and the sheer and jagged cliff walls that rise a thousand feet on either side of the river offered scant chance of an easy way out if anything went horribly wrong, but we also knew from experience that good planning, proper organization, thorough preparation, and tight teamwork and accountability would make all the difference in this uncertain and starkly beautiful environment. We also knew that if we focused our attention on these crucial variables, not only would our chances of safety and success increase dramatically, but we’d likely have great stories to tell, fond memories to treasure and good pictures to show off for years. So off we set – three doctors, a lawyer, a tech professional and me – for one of the best adventures we’ve all experienced in a long time…img_2408

A trip like this is a good analogy for life. And I’ve always believed that a good financial adviser is like your wilderness guide. We lead clients through all types of uncertain terrain, frequently where they’ve never travelled before, and where all kinds of dangers and opportunities abound. We operate in an environment where circumstances can change from bright and sunny one moment, to dark and stormy the next, and then back again at a moment’s notice. (Just look back over the last twelve months as an example.) We guide people who have varying levels of experience, and they respond differently, and often emotionally, to rapidly changing circumstances. So good advisers must be expert at assessing their client’s self-confidence, their tolerance for ambiguity, and their ability to maintain their poise under pressure. We must accurately gauge their preparation, and their capacity to remain disciplined in both high-excitement and high-stress situations. Then we must do all we can to tailor our client’s unique journey to their fiscal and emotional capabilities, stretching and coaching them enough so they grow to reach their potential, but taking care not to push them so hard that they risk breaking as we guide them through all kinds of challenging transitions.img_7724

Thus, advisers must be careful in deciding whom we choose to guide, and be willing to say “no thank you” when we sense the wrong fit. Because, just like an outdoor guide, the wrong client combined with the wrong circumstances can lead to disaster, putting both the client and the adviser in existential danger. By the same token, the right clients can be wonderful to work with, making a trip so fulfilling that it hardly seems like work, no matter what the challenges and circumstances along the way. They’re engaged, prepared and cooperative. They do the hard work required of them, and stalwartly and cheerfully adapt to circumstances and events that are beyond anyone’s control. They don’t blame, they take responsibility. They are clear when they set out as to why they’ve hired an adviser in the first place, and they’re careful to keep their expectations and their emotions within a reasonable range.

img_7676So what are the expectations that a client should have of an adviser? I’ll get to that in a moment, but first let me say a few things about what someone shouldn’t expect. Nobody should hire an adviser to constantly “outperform” a competitor, or to get a better return than some index on a quarterly, semi-annual, or annual basis. Neither should one hire an adviser to predict the economy or divine the future direction of financial markets. And one shouldn’t hire an adviser to “time” investments to get out of asset classes that are about to fall, and to invest only into asset classes that are about to rise.

This would be like hiring an outdoor guide to predict every aspect of a trip, to avoid every unknowable circumstance, or to guarantee that you’ll have perfect weather every day. It sounds silly in this context, but it’s astounding how many people expect something entirely different from a financial adviser than they would from a wilderness guide.

Any good adviser (or guide) will freely tell you they can’t consistently do any of these things. So they’d never build their reputation or their business on such hollow promises. Only the charlatans and the inexperienced will attempt to “prove” that they can.img_1764

Instead, hire an advisor for what they can control and what they can help you control. Hire an adviser to help you get, and stay, organized. It’s amazing the sense of confidence you can gain when someone helps you bring order to your financial life. You’ll know what you have, what you need, what you lack, and what you must acquire to reach your desired results. Hire an adviser to help you plan, and to be objective about the challenges ahead of you. Are your goals grounded in reality? Or are you making emotional decisions about crucial money matters? Hire an adviser to help you get prepared. Do you have the resources, the knowledge, the expertise and the discipline to succeed? Are you thinking through all the crucial variables? A good adviser will help you with all these, and more. Hire an adviser for the teamwork and accountability they provide. Successful people benefit from a sounding board for major decisions and life transitions. They grow from having a coach who is willing to hold them accountable for doing the hard work and persevering through challenging periods when it is easier to give up or settle. With the right adviser, these are results that are deliverable.

Life is fraught with peril, financial success is hard, and so too is a multi-day trip down the Rio Grande. Not knowing all the dangers, challenges and unexpected events we’d encounter, we carried more gear, more food and more water than we needed, as it turned out – but that’s always the case with being properly equipped. One entire day we paddled into 25 mph headwinds, the extra weight sapping our strength, slowing us down and draining our spirits. With the clarity of hindsight, it’d be easy to second guess those precautions.  Many do a similar thing with their finances as they lament their investment results compared to the now-obvious results of whatever top-performing asset class provided the best returns during the past quarter. But a wilderness trip is a serious undertaking, just like your lifetime voyage. Obviously, we hope for perfect weather and a glorious outcome, but wise voyagers make sure they’re prepared to withstand whatever comes their way, and they plan accordingly.

img_7736Now we’re looking forward to exploring the lower Pecos…

Thomas G. Twombly