Not long ago, I was asked by Financial Planning magazine to predict the future–and you'll see the results in an upcoming column. But the broader lesson of the exercise, to me, is that the world is constantly and forever changing. When you read the old cliche that "the most dangerous words in the English Language are: 'this time it's different,'" recognize that things are constantly becoming different. Those words are only dangerous if we make naive interpretations about the kinds of shifts we're dealing with, or try to oversimplify complex dynamics, or bet on outcomes that are far from certain.
You want examples? The Internet is changing the way we access information. We may not know the full consequences of this revolution yet, but we know that things are different today than they were back in 1994, when Internet Explorer hit the market. Add in social media, the introduction and evolution of mobile devices, the rising economic fortunes of emerging nations around the world, changing tax laws, new political dynamics, new discoveries of energy resources and new energy technologies–and (closer to home) the threat of FINRA regulation to fiduciaries and the threat of fiduciary competition to FINRA firms, and you have what I think is clearly a different world than most of us grew up in. This time it IS different–very much so.
But different how? The important question is not what is changing (we can see that), but what is the most effective business and professional response to those changes? We have great examples of responses that don't work (keep bidding up the prices of tech companies based on 'eyeball' metrics; flip speculative houses in an increasingly frothy environment; assume Wall Street firms are reliable counterparties), but you seldom see, in the consumer press or our professional magazines, many examples of how to surf the waves of change effectively.
As it happens, there is a reliable source of this information: a small handful of people who figure it out early. Inside Information was created to bring you not just news of what is changing in your business environment, but also to show how some of the more astute advisors are rethinking their practices. There are two good examples in this issue; Don St. Clair and David Armstrong are clearly change agents in the advisor space, in very different realms. For space considerations, I had to leave out a remarkable profile of how Steven Kaye, in New Jersey, is handling the new Department of Labor regulations in the 401(k) space. (Coming soon.)
I think the important answer to the important question is that change happens as a result of a lot of individual activity, a lot of experimentation, a lot of adaptation to new circumstances, some of it productive, much of it unproductive and exploratory. In any of a million trends, a few people will get it right well ahead of the rest. They become examples of a future that we will all someday participate in. In the narrow sense of mastering this one trend, they are already living in the future. Watching them, asking them the right questions, becomes our own best guide to the future.
To profit from this kind of information, you need to cultivate several characteristics. First, you need to be among the few members of this profession who think and read. This alone gives you an unfair advantage, because you have better access to informed reports about the emerging differences around us. If you are unusually astute, you are securing access to profiles of change agents who have mastered the future.
Second, and I think equally importantly, you need to be flexible enough to embrace all these changes as they happen. Many of you read through the David Armstrong article and felt balls of resistance in your stomach, because somewhere at your core you're allergic to the whole idea of wasting your time on social media. I know a lot of advisors who still use filing cabinets and resist the idea of going paperless. I suspect that, back in the day, there were people who were not totally sure the taming of fire or the invention of the wheel were such great ideas.
In my speeches, I often conduct a simple exercise with my audience. How many of you (I'll ask) would voluntarily go back to where you were 15 years ago, instead of being where you are today? Sometimes somebody will raise a hand, but usually the vote is unanimous. Everybody feels like they're better off now than they were back then. That tells us that, overwhelmingly, change has been positive for virtually all of us.
And I think it will be in the future as well. That was my message in the column: that even those who are buffeted by change, even those who allow it to sneak up on them and disrupt their lives, even those who resist it, eventually benefit from the constant flow of new thoughts, ideas, technologies. Those who embrace change are the foreordained winners of any meaningful race, and I constantly find it interesting that the people who fit my two simple criteria (think and read, are flexible and open to change) inevitably rise to success and to leadership positions in the profession.
The wisest thing I can say about the future is that it has never been a good idea to bet against it, or to bet that it will bring more bad than good. At a time when we seem to swim in a sea of naysay opinions, this simple idea can be a compass toward success, and perhaps also a consolation that, because of the efforts of you who lead and shape it, our future always seems to work out all right in the end.