A Return to Bedside Manner
I was watching the below TED video by Abraham Verghese as he discusses the evolution in medicine and how it has affected the doctor patient relationship.
He jokes that as patients have become data points that no doctor will believe you’ve lost a limb until they can see the results of a CAT Scan. His argument is that the most important innovation in medicine to come in the next 10 years: the power of the human hand.
As I listened I thought of all of the similar changes I have witnessed in my own industry and why I felt the need to go independent of the big institutional approach of serving the most clients possible.
When I started in the business we treated each client as a separate household and customized a plan to help them address their goals. We were good at the qualitative aspects of the client engagement because the quantitative aspects were fairly simple.
As a result of our “bedside manner”, clients felt heard and were more involved in the financial decisions.
As technology and information have evolved we have developed more efficiency in delivering risk adjusted strategies. This in turn has allowed for us to take on more clients and in many cases reduce staffing.
Unfortunately as the industry has become better at “manufacturing” strategies our “distribution” methods have become less personalized and more dependent on conference calls and power point presentations. Consequentially we know less about our clients and don't have time to proactively address the little things that used to give our clients peace.
We have failed to empathize with our client’s situation and lost sight of the fact that money is only a means to an end. We have become arrogant, abrupt and dismiss our client’s fears. We dazzle with charts and illustrations and expect our clients to delight in our ability to lose less in down markets than the corresponding index.
As a result I have seen people gravitating back to less efficient strategies simply because they understand them and therefore feel less dependent on someone to explain why they are invested the way they are. If only someone took the time to truly understand them – their goals and values. They would gain greater confidence in the process and feel more confident about their financial futures. I sincerely hope that Dr Verghese is correct in his prediction of a return to the old-fashioned physical exam, the bedside chat, the power of informed observation. Both for his industry and ours.
Investing involves risk including the potential loss of principal. No strategy assures success or protects against loss. Past performance is no guarantee of future results.