For the third year in a row, Schwab Institutional is running a series of TV commercials in support of independent Registered Investment Advisor firms. That’s us! The commercials are an extension of Schwab’s long-running advertising campaign, focused on helping the public understand why terms like “independent,” “fiduciary,” and “Registered Investment Advisor” matter – or at least should matter – to anyone seeking solid financial advice.

You can see the TV ads now through mid-May on CNBC, Fox Business, Bloomberg TV and Golf Channel. They stand out to us for their emphasis on the right kinds of questions to ask when assessing a financial advisor. While most financial services advertising is aimed at products and sales, we’d say Schwab gets it right. Here’s our favorite:

Schwab’s ad campaign is hardly the reason we do business with them. But it’s one more way their thinking aligns with ours, as we turn to them for holding our own, and our clients’ personal investments.

Financial writer and friend Wendy Cook posted the following piece on her own blog recently, and granted us permission to share it here.

We like Wendy’s post and applaud the ideas of the late Hans Rosling because his work parallels our own emphasis on evidence-based investing. His bestselling book Factfulness points out that our instincts and biases often make it difficult to perceive the world factually. Just as we point out in our work with you, and as we’ve highlighted in past reviews of Michael Lewis’ book Moneyball, it’s tricky work to get out of our own heads and better understand the world through data and evidence minus emotion and instinct.

*Keep in mind Wendy writes for a special group of advisors.

Facts, Finance, and Feeling Good About Yourself

by Wendy J. Cook

Recently, I finished reading Factfulness by Hans Rosling. I discovered Rosling’s work nearly a decade ago when his YouTube video “200 Countries, 200 Years, 4 Minutes” went viral, at least among us data-dorks.

Finding Factfulness

Making the leap from Rosling’s four-minute video to his full-length book took some time. Unfortunately, it was time Rosling himself did not have, having passed away from pancreatic cancer in February 2017. Reminiscent of the late Gordon Murray’s inspiring collaboration with Dan Goldie on The Investment Answer, Rosling dedicated the last year of his life to completing Factfulness. He collaborated on it with his son and daughter-in-law, who published it in 2018.

Referring to “data as therapy” and “understanding as a source of mental peace,” Rosling urges us to employ “factfulness” to recognize that the world is usually better off than we think. With Bill Gates describing it as “one of the most educational books I’ve ever read,” I figured it was worth checking out.

Factfulness and Finance

How does factfulness work? Without it, we become overwhelmed by all the bad news going on around us. With it, the greater facts remind us that historical conditions have been even worse. In other words, we are making enormous progress, but close up, we can’t see it. Rosling explains:

“Journalists who reported flights that didn’t crash or crops that didn’t fail would quickly lose their jobs. Stories about gradual improvements rarely make the front page even when they occur on a dramatic scale and impact millions of people. … Safe flights are not newsworthy.”

It’s easy to connect these messages with the same ones you likely espouse for yourself and your clients as you help them embrace evidence-based investing.

A Higher Purpose

Beyond that, I took a greater message from the book. If your advice has been incorporating insights gained from behavioral psychology, it’s one you’re already familiar with, but it bears repeating: By losing sight of factfulness, it may often feel as if BIG acts, ENORMOUS effort and MAJOR improvements – the kinds we read about in the paper – are the only changes that matter.

All facts considered, this could not be further from the truth. Ordinary, everyday accomplishments are what Rosling describes as “the secret silent miracle of human progress.” Your and my small, unsung deeds are the streams that feed rivers that run to oceans of accomplishment.

So, whether it’s going that extra mile for your clients or dedicating some time to a community project, let’s each take on one or two good deeds – today, tomorrow, and the day after that. They don’t have to be huge; just make them a habit and, over time, that will do.

Give the Gift of an Amazon Review

Here’s one small possibility you may not have thought of: Give a good financial book a positive Amazon review.  

You see, some of my best friends are financial authors. So, I happen to know, one of the best ways you can help them increase their sales and readership is to review their books on Amazon. These days, a strong presence there is electronic gold, like being in the “featured books” section of a brick & mortar store.

Your review need not be novel-length itself. Two minutes, five stars, and a few sentences should do it. Go ahead. Pick some of your recent favorite financial reads, and go to it.

Financial simplicity, like many goals, is as desirable as it is elusive.  

Or so it seems. 

If you took a sample of 100 investors and asked each one about the vital signs of their portfolios – their fees, returns, and allocations – you’d be hard-pressed to find many who could speak confidently and accurately about them.

This isn’t just a guess from left field. In 2016, MarketWatch cited a Prudential Investments retirement preparedness survey that  found more than 40% of Americans had no idea how their investments are allocated. We’ve seen similar stats from other surveys published since then. 

What’s most disappointing about this apparent collective bewilderment, is that the system seems designed to be this way. We work in an industry where thousands of “advisors” are not only encouraged to sow seeds of confusion, they’ve made millions of dollars doing so. 

When a broker pulls an investor out of their comfort zone and into the weeds, the investor becomes vulnerable. Accordingly, advice becomes a sales pitch, and costs become confusing –  a pattern we see time and again. 

We know investors deserve better, so we’re on a mission to make the complex simple, to make financial conversations comfortable, and ultimately to shed a liberating light into the dark corners where families have been harboring their greatest financial fears for years. 

As our friend Carl Richards has embodied in his Behavior Gap sketch above, an advisor’s job isn’t to prove how much they know. It’s about helping investors see the few, elegant, simple changes they can make to their plan, to make a huge impact over the long-term.  

There’s nothing more rewarding for us at Hill Investment Group than seeing someone’s reaction when the air finally clears for them, and they realize that simplicity wasn’t as elusive as they once thought. 

In the words of pianist and composer Frédéric Chopin, “Simplicity is the final achievement.”