Futurology and Independent Financial Advisors

I have been blessed during my career at Sun in being an Sun Global Resolution Troubleshooting Program leader which has made the Kepner Tregoe Rational Process toolbox part of my every day work and home life. It gives a structured approach to

  • Deciding what problems need to be solved
  • Establishing root cause and appropriate corrective action
  • Avoiding future problems
  • Making rational decisions
  • Undertaking Potential Problem and Opportunity Analysis (Risk management)
  • Performance System Engineering : Why people don't do what you think they should
I have also used some of the other KT tools such as Incident maps (blame management) and strategy facilitation. We (Steve White ex-Sun now with KT) and myself also layered some other disciples on top of the rational process including NLP and Bayesian statistics which proved to be effective and useful.

While not formal in the mathematical sense, the KT Rational Process does provide a repeatable and effective process for the commmon situation in the world of supporting computer systems and the people who use them and the wider world of business and I would argue outside work.

Most of us are on a journey trying to avoid being poor in our old age and avoid our little people being debt burdened when they leave university, etc. (I have to qualify what I say here as I am a trustee of the Sun UK Pension Fund, so if you are a member of the Sun UK Pension Fund, I am allowed to give 3 bits of investment information (note not advice).

  • 1. Get a Scottish Wife, they don't spend much money.
  • 2. Save in the region of at least 22% for your retirement.
  • 3. By law the trustee's are unable to provide investment advise, so if you are unsure of what financial actions to take, consult an IFA.

My personal past experience suggests that I would have been better taking advise from a gentlemen offering good odds on a nag on a race course on Gold Cup day and than taking advice from an Independent Financal Advisor. Maybe there are good IFA's out there who act for their clients, not I have not met them and none of my social circle has either. So given that IFA's appear to work for their own pockets rather than mine, I have tried to take resposibility for my financial planning and become informed enough to make reasonable financial planning decisions myself. The 3 most important aspects to effective investing are assest allocation, charges and spreading of risk. The last probably being the most significant over the longer term. Most (3/4) fund managers perform worse than an index tracker, so given they look at markets all day and are better dressed than I am, what chance do I have of doing a better job at assest allocation then them or even picking a fund manager who will at least match an index after charges.

How similar are Futurologists and IFA's?

So I suggest the future is about as knowable as financial markets, you can not know enough to make fully informed and accurate micro predictions about systems with this number of dimensions and complexity. I know I don't have insight into future technlogy, financial, political, social or any other trends in the same way I can't make accurate prediction about share prices, but I can find ways to spread risk, diverify the allocation of assets and keep charges low. I also expect there to be a small number of true visionaries who add real value by weeding out the higher probability future states from the lower probability ones. But for each visionary, there are many, many Indepedent Future Advisors who will sell you poorly performing future states, with high buy in charges and high annual management fee's which are unsuitable for your current situation and future aspirations, and have significant transfer costs when your situation changes and you need to move to a different future state.

Should the provision of futurology advise become a regulated industry? It has probably removed the worse excess from the provision of financial services to consumers, but could we really say that an IFA gives advise in the best interests of their customer? If we can't pick out the real visionary from the pool of Independent Future Advisor, then a possible strategy of

  • 1. Use the pond of Independent Future Advisors(many write books or blogs) to assist us articulating possible future states, but avoid commission driven IFA's.
  • 2. Apply Rational Process to identify risks and opportunites, reevaluate as events unfold and to ensure strategy is aligned with the most probable future states, accepting some risks for the opportunities it bring, but being protected where practical from the unlikely and catastrophic events.
A more rational course of action than just trusting your future with an IFA (Independent Future Advisor)?

You can tell I have been on a few train journeys with time on my hands!


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