Data is Pointless, Information is Meaningless, Insight is Wisdom.
One of my key roles in overseeing client relationships is to provide clarity, and to help clients sift through the noise.
Data is momentary, it flicks across our screens.
Information is daily and summarises the data, which over time will provide some knowledge.
However, people can have an enormous amount of data, information, and knowledge, but still have little clarity, insight or wisdom.
The leap to ‘Insight and Wisdom’ comes from ‘Experience and Relationship’, and putting these into an open conversation, ‘Time to Think’, the ability to consult, being your personal finance director.
Sifting through the noise allows us to bring greater clarity and help reduce uncertainty, in the decisions we make with clients.
The root problem is complexity and so the solution has to be simplicity.
Managing risk and linking this to client goals, creates a highly personalised approach to Financial Happiness.
Transforming what would normally be highly complex, into bite size pieces of Insight and Wisdom.
So data and information can literally be meaningless, which is scary because we humans do like to have some way of dealing with uncertainty!
We would normally go back and see what was useful in the past, to see if it fitted to today, but what was once useful, may no longer be so.
What we tend to want to know is WHY, and this opens the possibility for discussion and the ability to adapt.
In my work I have to test assumptions, both my own and those of my clients, and by being open to ‘the possibility of being wrong’ you end up with a more open conversation.
I was listening to a speaker recently who always carried a card in his wallet, which read ‘They might be right!’
Over the years he had come to realise the secret of his success, the ability to discuss different approaches, which always led to better insight, as opposed to going it alone.
The thinking behind this was to remind him that, whilst we all hate uncertainty, creativity requires courage to consider all the options, to come to the right solution.
It’s therefore the openness to new ways of thinking that allow us to grow, to test and explore, so that we can better deal with uncertainty.
In summary everyone’s assumptions are hidden, but by taking a step back and having what I call a Clarity Conversation ® it’s possible to come to a more right fit solution.
In this context, experience, knowledge and insight lead to better conversations on how to manage risk.
Perhaps the most misunderstood concept in financial planning, and the subject of my next update!
Austyn Smith is a leading advocate of the ‘risk managed’ approach and ‘all weather’ investing, and has been featured as a Citywire ‘Cover Star’ in both 2010 and 2013.
Following his work on risk reduction strategies, in 2011 he was recognized by Citywire Wealth Manager magazine as ‘Being in a position of some influence among your peer group, and likely to take a leading role in setting the investment agenda for UK Private Client managers.’
Austyn has recently contributed to leading publications by Citywire, and the Institute of Directors, and over the years has been quoted in the Sunday Times, Mail on Sunday, The Independent, and Bloomberg Markets.
With over 25 years wealth management experience, Austyn lives with his wife and children, Black Labrador and Springer, in Beaconsfield, Bucks.
Research Sources: Bloomberg, Financial Times, Wall Street Journal, John Authers, Robert Schiller.