Be Prepared: How Being an Eagle Scout Shapes My Role as a Financial Advisor

While there have been many times in my life when I have felt tremendous joy and pride, whenever I’m asked for the one thing I’m most proud about, I never hesitate sharing my favorite response. My Scouting experience – which led to me to become an Eagle Scout, the highest and most prestigious rank in Boy Scouts – is the hands-down winner.

That’s because I know the primary reason I’ve had so many other positive experiences in my life has to do with the critical lessons I learned as a teenager in Boy Scouts. These are lessons that have shaped my relationship with others by allowing me to live out and express core values that clearly were nurtured and amplified through Scouting.

Along the way, I’ve learned you never say, “I was an Eagle Scout.” Once an Eagle, always an Eagle.   Values do not shift. They are timeless in whatever role you’re occupying, as we all wear multiple hats – Father, Son, Husband, Brother, Leader, Trusted Advisor.

I have no doubt my road to becoming an Eagle Scout continues to influence my professional life as a financial advisor. To understand the parallels, it is helpful to first share the Scout Oath and Law.

First, the Scout Oath: “On my honor I will do my best to do my duty to God and my country and to obey the Scout Law. To help other people at all times, to keep myself physically strong, mentally awake and morally straight.” 

  • The key to doing well in investing and advising others on their financial affairs depends on you considering it a duty.
  • It depends on you doing your best. No shortcuts, and you must be resourceful by seeking the help of colleagues and trusted partners to serve the client best. Clients are delegating to JNBA because they either don’t have the expertise to do it themselves or the time or interest to devote the proper attention to cultivating the growth and protection of their wealth.
  • Honor is such a unique word as well – it escalates that essential duty to a level of reverence.

Second, the Scout Law: “A Scout is Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean, and Reverent.” 

  • Trustworthy – keeps his promises, people can depend on him to do what he says.
  • Helpful – concerned about other people.
  • Thrifty – saves for unforeseen needs, protects and conserves natural resources, carefully uses time and talent.
  • Brave – courage to stand for what you think is right and can face danger when afraid.

As a shepherd of other people’s wealth, it’s certainly important to help them prepare for the future. Taking risk and investing in an always volatile stock market – even when the long-term evidence for doing so is incredibly convincing – is often difficult to do when you know you will get knocked down from time to time. Incurring short-term returns that are often disappointing is the primary reason why investors earn higher returns in stocks over time!

Hence, educating clients on the history of financial markets and how they work can ensure they enter the arena well equipped. They’ll understand that they are taking risks in order to avoid other risks, such as the insidious impact of inflation on the purchasing power of their portfolio, and will also learn how to reduce the impact that volatility has on their portfolio and emotions.

Trustworthiness is critical component to being successful at this. Unless your clients are confident that you care and are there to help, your ability to convey insights about the markets and financial history may be greeted with suspicion. What every investor should know is the future is inherently uncertain, and there’s a big difference between uncertainty and risk. In risk, you can predict the possibility of a future outcome while in uncertainty you cannot predict the possibility of a future outcome. Risk can be managed while uncertainty is uncontrollable. Risks can be measured and quantified while uncertainty cannot. Risks taken will occasionally not be rewarded, but that should not matter if you have a diversified portfolio because the winners will offset the losers.

“Be Prepared” – The Boy Scout Motto. Even with a fairly reliable crystal ball, building a portfolio that would thrive in just one state of the world would be reckless, no matter how likely you thought that scenario might be. For example, you might be 100% completely confident that we’ll have a healthy economic expansion with solid profit growth over the next two to three years and choose to be 100% in high-growth stocks. But if that one scenario does not unfold exactly as you envision it, your portfolio could be crushed. Since the future is inherently uncertain, we construct portfolios with multiple asset classes such as equities, bonds, and real assets to ensure there are always parts that will be working well under whatever economic climate we find ourselves in. For instance:

  • Stocks are for long-term wealth creation and growth, as well as to outpace inflation along with stable dividends.
  • Bonds are for diversification and immediate cash flow needs, including liquidity for spending events on the three-to-seven-year horizon.
  • Real assets are for inflation-linked income streams that are uncorrelated with other assets.

Finally, I’ll close by mentioning that to attain the rank of Eagle Scout it is not enough to earn 21 merit badges. You must be active in the troop and demonstrate these critical values and principles day in and day out. Translating this to the role of advisor, this means one must strive to go beyond simply providing the client with good technical advice, but doing everything within your power to ensure they understand the advice in order and will follow it when the path becomes difficult. After all, we are just the guides, but it’s our clients’ journey and we owe it to them to make it a successful one. That is true ADVOCACY — and also aligns very strongly with the Scout Spirit!

 

 

 

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, Inc.

 

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