Painting word pictures that people will understand is considerably more effective than the technical explanations we invariably give to our clients. So I am always on the lookout for new stories to tell – though sometimes the message or the metaphor is not immediately apparent.
This was the case recently when I found myself in my car, doing 70mph, out of control, sliding toward the central reservation of the M4. I was driving to Devon to spend a weekend visiting my new twin grandchildren and if I did not make the journey I would not be able to visit for a further 10 weeks.
It had been snowing during the week, but the forecast was not bad and the roads were relatively clear of both traffic and snow. Conditions were so good the cars that were on the road were travelling at a fair lick – me included.
Things were going well until a coach suddenly pulled into my lane, forcing me to move into the outside lane to avoid slamming the brakes on. As luck would have it the motorway suddenly cut through an exposed area, and what had been a clear outside lane became covered in frozen snow. I had a coach on one side of me, the central reservation barriers on the other, and I was dancing on ice – not an ideal situation. Then the snow got deeper.
The next thing I knew the car was slewing sideways and the central reservation was getting closer. What to do? My mind clicked back 25 years to the skid-pan training I did in Norway and I eased off the accelerator and kept my feet off the brakes.
Gently nudging the steering wheel the car gradually righted itself, and with a bit of fishtailing it got back on track. I made my way back to the middle lane, and stayed there. Once the adrenalin finished coursing through my body I reflected on how things could have gone, and what the lessons were.
First, there was minimum intervention from me. My knee-jerk reaction would have been to brake and steer the car into even greater trouble. Instead I let the car do what it was programmed to do. It is fitted with a powerful computer controlling the power and braking to each of the four wheels. Everything had been programmed for the best possible outcome, provided I did not get involved.
This experience lends itself to several areas of client behaviour, particularly concerning investments, market crashes, overconfidence, black swans, and human intervention, to name just a few. But perhaps the biggest moral of the story is just how quickly I could have been a statistic, and highlighting the need to plan accordingly.
And the next biggest: buy a car with computer controlled four-wheel drive.
This experience lends itself to several areas of client behaviour, particularly concerning investments, market crashes, over confidence, black swans, and human intervention to name just a fewDennis Hall is managning director of Yellowtail Financial Planning
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