A financial advisor is a way to deal with information overload.
Life is about moderation. Like too little, too much is harmful. Consider information or what passes for it.
I recently saw a comment that said as much information would be created in the next 48 hours as existed in the entire history of the world prior to 2002. Is that exciting, amazing or terrifying?
Our education likely misses the part where information is attached to a hierarchy of meaning. What follows is the one I use and it serves well enough when I remember to pay attention.
- Data – an unattached bit. Something with neither context nor filters for validity.
- Information – filtered data. Again no applicability requirement.
- Knowledge – A system of information that is internally consistent and which offers the opportunity to discover new aspects and nuance. If I have entered the knowledge structure with one piece of information, I am likely to find how it fits, what else there is and why it matters.
- Understanding – This is two part. You must understand the knowledge but you must also understand what it is for. Knowledge that cannot be applied is not especially more valuable than no knowledge. The combination of knowledge and what it is for is meaning. You do not really know anything until you know what it means. You should know something in two ways. The general meaning and what it means for you.
- Wisdom – The ability to use the discovered meaning to further your own cause. Usually this involves connecting two strings of meaning. One string is my problem or opportunity. The other is the meaning string of possible solutions. Wisdom connects them.
Reaching “knowledge level” in more than a few subjects is impossible. Staying there in one is often difficult. So what to do?
Use a guide, coach, map or GPS.
The true calling of a financial advisor is to help a client assign meaning to their goals and to present and help implement the financial tools that will achieve them.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.