How Six Hats Can Facilitate Excellent Financial Stewardship
As an advisor to the affluent and a relatively new Six Hats instructor (I took the certification course in September of last year) , I have been contemplating the most effective way to introduce Six Hats thinking into my practise. I thought about how erosian can have such a negative effect if we neglect our natural resources. Similarly, the greatest cause of wealth erosion is the neglect of one or more of the key areas off financial stewardship. Financial stewardship can be broken down into seven areas:
- Cash Management
- Debt Management
- Tax Avoidance
- Estate Planning
- Family Governance
- Investment Management
- Risk Management
Unfortuanely, most times the periodic reviews between affluent families and their advisors are dominated by a discussion of the investment management issues. If the investmment performance is strong, the advisor wants to gloat about it and if it is poor, the client wants to "do something."
I think separating out each of these areas so that they could be discussed exclusively once a year, just as the six hats method separates our the elements of thinking would reult in much more focused thinking about each of these elements. Furthermore, selecting an appropriate blue hat focus issue and applying a sequence for each of these issues would in a systematic way uncover opportunities that would be missed using traditional methods.
This seems to be a way of following Edward's suggestion of directing attention to areas that are often neglected. I would most appreciate comments and thoughts on this. How can I improve on it?
Tags: hats, manager, naked, portfolio, six, stewardship, www.nakedportfoliomanager
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Comment by Franis on April 6, 2010 at 4:34am -
The red hat seems appropriate here. I don't know about financial planning at all, (expect to manage my own meager resources. I've heard it said that the very rich and the very poor are quite similar in their strategies and ability to manage their resources.)
What I'm thinking of here is to make a list of what appeals to people in general. Because the missing ingredient that I can notice in your post. How to make an appeal to customers of the advantages of addressing the other aspects of the service you can provide?
Since I delve into these "unexplored regions" quite a bit - and have to figure out how to get someone interested in what they don't have any clue they even need... I've learned some ways to do that. One way is with telling a (funny) story that illustrates the need.
The other is to explore what needs are in general. Why do people need services and stuff?
I'm not sure exactly what I'm doing here. I find myself having internalized some of what I've read about de Bono tools. So I'm not really sure how to describe what I'm doing so you can do it too. Maybe one of the other trainers can help describe what I'm doing here. I can only show an example of having done it and hope someone else can describe it. Because I'm not educated enough (yet) to articulate it for others.
When I make a list to explore the various ways that people are driven to buy or be motivated to spend their time, I get something like this:
* Belonging: membership - contribution beyond self-interests - stewardship
* Power: exerting control & influence - tied to identity - responsibility - philanthropy (if combined with the above)
* Curiosity: - getting priority - original thinking - questioning - pushing against tradition & boundaries
* Courage: - daring - unanswered question fascinate, which encourages repeated exposure
* Prestige: - status - desire for excellence - pride - mastery - having ways to express a precious value
* Craving: ownership, when tied to identity, short-term sense of fulfillment, when tied to "security", ( when tied to power, a sense of control - (the personal touch, when tied to belonging)
* Fear - of immediate consequences involving fight/flight/freeze reactions, change on a dime - desperation, rescue strategies
* Security - familiarity - habits - certainty - trust - longevity - gradual development - gaining advantage by practice and skill building
OK - I wish that someone who is a real trainer could tell me what I just did here.
Robert, can you do something with this list? Obviously, anyone who might be interested in categorizing appeals could use such a general thing. But, is this useful to you?
Let me know.
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