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Uncertainty and the Value of Financial Planning August 2018

Aug 21, 2018 | Business Owners | Families | Other | Today's Professionals

Whenever we are surprised by something, even if we admit that we made a mistake, we say, ‘Oh I’ll never make that mistake again.’ But, in fact, what you should learn when you make a mistake because you did not anticipate something is that the world is difficult to anticipate. That’s the correct lesson to learn from surprises: that the world is surprising.
-Daniel Kahneman

At Pathway, we often find that clients are moved to seek out financial planning by the discomfort that comes from uncertainty. This uncertainty can be generated from many different sources:

• Maybe they are approaching retirement and suddenly, their spending plan will no longer be determined by the paychecks hitting their bank account regularly.
• Maybe uncertainty is coming from a big drop in the stock market, and they are wondering what impact it’s going to have on their life, and what actions they should be taking.
• Maybe they have inherited a large sum of money, and the perceived responsibility to “get it right” is scary.

When a client comes to us in that acute state of discomfort, we do not aim to plan away every bit of uncertainty, giving the client an unwavering path to future success. While that would be great, unfortunately we can’t anticipate every possible curveball that life might throw. Instead, we aim to help bring focus to what’s important and what is under a client’s control. We can collaboratively build a framework that helps a client understand what decisions are available to them, and the corresponding effects that those decisions are likely to have on their financial lives. We can illuminate potential paths to a successful financial life, as the clients define it.

Perhaps most importantly we can help clients develop confidence in their ability to respond to life’s uncertainty with intentional decision-making that is supported by the framework we create together.