Self-Awareness and Staying Educated

Have you ever come to the realization that your understanding of something in your past was wrong? In other words, at a later point you became aware that your memory of an event or time period was false.  I’ll try to explain.

At an early age, I considered myself to be a well read and intelligent student.  The foundation for the well-read part is best laid at my sister’s feet.  Growing up, she constantly took her young brothers to the library.  We were encouraged to check out as many books as we could carry.  She especially encouraged us to read difficult books beyond our grade level and age.  More than a few times, the librarian questioned my selections. This all led to a lifelong passion for reading. 

By the time I reached 7th grade, I had read hundreds of books suitable for a much older reader.   Being so “book smart” I had the temerity to question everything and everyone in Sister Mary Elizabeth’s class.  I raised my hand constantly to correct the facts of a particular point.   The sister enjoyed my interruptions so much, she would send me to the school library to document the facts citing a specific book passage. 

It was only a few years later that I realized that I was such a pain in the @ss that the good sister sent me out of the classroom, so she could conduct the class in peace.  While I thought I was being brilliant, I was just causing a distraction.  I wasn’t nearly as smart as I thought I was and there were a whole lot of books I had yet to read.

That realization has helped me to be more self-aware.  This is especially important in client meetings.  If I’m not listening intently, I may miss a social cue they are signaling about their feelings or fears.  In fact, I make a point of taking classes that improve my skills in a variety of ways.

Clients may not know this, but the Investment Industry requires Continuing Education (CE) credit hours.  The number of hours vary by the regulatory agency overseeing the particular advisor.  For instance, advisors under oversight by the Financial Industry Regulatory Agency (FINRA) are required to complete CE every 3 years.  If your advisor is a broker with a Series 7, this is what they are required to take.  Having taken this type of CE for many years, I can assure you that there is little to no value to either the broker or the client.  If your broker is not pursuing other forms of education, you as the client are being disadvantaged.

Other designations often have higher levels of CE requirements.  For instance, as a CERTIFIED FINANCIAL PLANNER™ professional, I am required to take 30 CE credit hours every two years.  Two of the CE hours must be on Ethics. 

Furthermore, as a member of the National Association of Personal Financial Advisors (NAPFA), I’m required to take a total of 60 CE hours over the course of two years.  This is a mix of core and elective courses.  The core courses cover: Insurance & Risk Management, Investments, Tax Planning, Retirement Planning, Estate Planning, Ethics, and Communications.

I’ll be the first to admit that this is not necessarily a guarantee a NAPFA advisor is smarter than any other advisor, but you can at least be assured that education is high on their priority.  It’s just an indicator for you to use in assessing whether an advisor is right for you.

A few other areas to explore before hiring an advisor should include:

  • Academic education
  • Experience
  • Compensation: commission and fees vs. fee only
  • Conflicts, i.e. are they compensated for one product over another
  • Designations
  • Industry affiliations
  • Firm culture

If you would like to learn how an independent, fee only advisor can help you, please contact me.  Feel free to share with others and make suggestions for future articles: peter.oneill@fiduciamwealth.com

Happy New Year Everyone!