My Biggest Epiphanies in 2022

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I learned a lot in 2022. Here were my biggest epiphanies.

A good investing year

Just like everyone else, my portfolio (consisting of low-cost index funds in a suitable asset allocation) took a hit in 2022. It actually took a double hit, because both stocks and bonds incurred losses.

It was a good year.

How could that be?

As you well know, down markets are the price you pay to receive the rewards of the riskier asset classes when markets recover. No reasonable investor expects positive returns every year, although much of the financial media (but not this publication) conveys exactly that message.

It was a good year for me because I didn’t sell and convert my unrealized losses into realized ones.

I also continued my practice of investing every month in the same funds, in the same asset allocation. I felt like I was buying stocks at a fire sale.

I have no idea if the market will recover next year or the year after, but I like my odds.

Fees and value

Much has been written about how advisors should charge their clients and how they can demonstrate value.

Based on my interactions with a diverse group of advisors, I disagree with most of it.

There is no “right” way to charge and no one way to demonstrate value. In fact, there is no need to “demonstrate” value. It should be obvious to your clients.

This year, I referred some clients with substantial assets and complex financial planning requirements to advisory firms that charge an AUM-based fee.

I referred other clients with less assets and simpler financial requirements to a firm that sharply discounts its fees and charges a flat fee.

All the clients I referred are happy. None of them questions the value they are receiving.

Their experience caused me to view these issues in a more nuanced way.

A direct correlation

On two occasions last year, clients I referred called to discuss their choice of advisor with me. When I asked why they selected the advisor they both said: “I liked them”.

When I probed more deeply, they each described how they presented “everything” on their mind and they felt comfortable with the advisor.

I’m often asked about the trait that correlates most directly with success.

The most successful advisors are genuinely curious. Their curiosity extends far beyond investing-related subjects. They want to know about the lives of their prospects and clients. They ask them about their life’s journey, hobbies, families and travels.

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They don’t try to be charming or to entertain or even to be interesting. They come across as genuinely interested.

They don’t try to steer the conversation in any direction by asking carefully scripted questions. They are happy to talk about anything that comes up.

They are also authentic and caring.

But their predominant trait is curiosity.

What I underestimated

In 2022, I continued to underestimate how difficult it is to put aside our agenda and genuinely focus on others.

More AUM. Better Relationships.

Guaranteed

My micro-learning course will increase your AUM and deepen your relationships.

If not, I’ll give you a 100% refund of the $29.95 cost.

Volume discounts are available.

More Information

Several advisory firms didn’t hire my firm to train their advisors because they couldn’t wrap their arms around abandoning their more formal approach to converting prospects into clients.

I completely understand their reluctance.

The traditional approach that puts the advisor in the center of action is far more appealing than one that subordinates this role to the prospect.

I am much more comfortable recognizing this limitation on the willingness of some firms to adopt The Solin Process.

Gratitude

I finally realized the full potential of gratitude.

It helps me overcome the awesome pull of negative bias.

It keeps me from catastrophizing.

Most importantly, it reinforces how much I appreciate the support of my readers, friends, family, clients and colleagues.

Dan trains executives and employees in the lessons based on the research in his latest book, Ask: How to Relate to Anyone. His online course, Ask: Increase Your Sales. Deepen Your Relationships, is currently available.