Matt: All right. Thank you, everyone, for joining us today on the You’re a Financial Planner; Now What? Podcast. Today with me, I have Diane Bourdo, who is the President at Humphreys Group and a longtime mentor of the FPA Residency program where I actually met Diane last fall. So Diane, thank you so much for being on the show.
Diane: Thanks, Matt. It’s really fun to be doing this. My favorite subject.
Matt: Yeah. So today we’re here to talk a little bit about the cultural narrative surrounding women and money. And Diane, I’m curious, why is this such an important topic? Why does this matter for the future of the profession?
Diane: This is really a passion of mine, the role of women or the role of money with women, and women and wealth, and even women advisors working in a male dominant industry. I’ve always considered myself a feminist even when I was a very young girl. And so being the head of a firm that has always had a focus on women has been a bit of a no brainer. Our firm was founded in 1983 and we’ve always targeted women who were recently divorced or inherited women. And so the whole women in transition before it was really a thing. That’s always been our passion.
Matt: What is it in your upbringing or your career that has really sparked this passion of yours?
Diane: I was thinking about this before we got online and it’s not that there was any big defining moment in my childhood. My mother was fairly passive, so I didn’t have a good role model with regard to her. My father was fairly domineering and so I was always a bit of a resistor to that. So for me, standing up for the interests and perspectives and strengths of women has just been something I’ve always done.
Matt: My mom, she was a single parent growing up and she never ever felt confident talking about money with me or really with our family members. And do you feel like that cultural norm has impacted not only the demographic of our clients, but also the demographic of the profession as a whole?
Diane: Yes. And I think even … it’s a cultural thing. I mean everybody may be tired of the idea of smashing the patriarchy, but that really is what it amounts to. I think that the narrative about women and money serves the status quo and we have a definition of what it means to be good with money or what it means to be confident about money. And I would say that that’s not necessarily in sync with my own experience for people I know personally, but also, and especially with the women that we’ve worked with.
Matt: You know, you said the status quo or what it means to be confident or successful financially. Can you elaborate a little bit more on that and what does that exactly mean for not only any of our clients, but particularly with our female clients?
Diane: I think that when you have an industry that’s basically revolves around money, which ours does, it’s easy to really limit yourself to numerical definitions of success. And so success has really, mostly in our world, been defined in terms of metrics, the numbers. And I completely understand that, that’s important, rate of return, AUM, all of that. That’s an important piece of the whole. But I also think that it really leads to narrow thinking. It is in some ways a glorification of money, a type of greed. And I would like to think that we have values beyond that. So for us, whenever you meet anyone in our world, one of the first questions is what is your assets under management? And that really is just such a small piece of it.
Diane: What about the quality of the client experience? What about how you treat your employees? And then from a client perspective, what about their financial outcomes? Did they accomplish their goals? Do they even know what their goals are, their values and their priorities? And have you been able to help them gather the data and use that data and their goals and priorities to make really great trade-off decisions? I think another definition of success is knowing where you spend your money, cashflow tracking, things like that. And so really looking at your whole financial life, not just a single metric.
Matt: So many times we categorize our clients as high net worth or ultra high net worth as this defining factor of who we’re serving. So what are some of the things you’re looking at when you’re looking to bring on a new client or when you even look at your own book of business? What are some of those defining features or values of your clients?
Diane: This question is really a version of what is your ideal client. And we get asked that and we consider that all the time. And for us, maybe the biggest, the descriptor I would put at the top of the list is engaged. We want to work with clients who are engaged in the process, who are engaged in their own lives, their own financial lives. And they may not know at the beginning of working with us what their financial goals are, but they’re willing to go through the discovery process. A lot of it, of course, most of it is self-discovery. They’re willing to really let us guide them through this decision making process and to get more of what they want in the end. But so for us, clients that are really engaged and are willing to consider the aspects of their financial lives that are not necessarily numerical. Their emotional aspect of it as well.
Matt: I find that really fascinating because everything we’re taught, at least before we actually start working in the profession, is so much on the technical side like, “Okay, the clients have A, B, and C, here’s how you get them to outcome X.” When you’re first starting to work with your clients, how do you describe your goals for them? I know you said earlier on that giving them that sense of confidence and that self-discovery to spend in line with their values is really important. How are you communicating that to your clients when they’re coming in for the first time?
Diane: The truth is we give them an experience of what that means, what that really looks like. So what I mean by that is we are big fans of Money Quotient. Money Quotient is a pretty in-depth discovery. It’s a series of discovery tools. And it’s a way to do a consistent, somewhat systematic repeatable discovery process with clients.
Diane: And there are different ways that you can do it, but we do it in a fairly in-depth way. So we use, when we meet with a new client or a potential client for that matter, we use a handful of those worksheets that allow us to give them a taste of what the process is. And also in doing so, telegraphing the fact that we’re going to ask you what you think about money beyond the numbers. We’re going to ask you maybe what is your first money memory. We’re going to ask you how do you feel about change. And we’ll tell them why we do that, but we give them a sense of what our conversations are going to be like. And at the same time we talk about the technical aspects, the longterm projections and the insurance analysis and the estate review and all that kind of thing. But we really want to have with them, right off the bat, the type of conversation that we’ll have when they’re a client.
Matt: That’s really interesting, again, getting into those money memories and what brought us to where we are today I think is so important to building that confidence. And I know I’ve heard you talk about this before, but can you give a little bit more insight into your particular passion of helping women go through this? What are some additional barriers that you see for women to gain that sense of confidence with their money?
Diane: I think it’s interesting. I think that it’s just a story that we’ve been told and the biggest obstacle or the biggest barrier is believing that it’s true. And so the way to stop that narrative is just to see that it’s a narrative and we can decide to set it aside.
Diane: As I said earlier, the idea of women not having confidence or knowledge about money doesn’t sync up with my experience with women. And generally I’ve found that women are much better at money than they’ve been led to believe. And of course it’s also true that men are generally not as good at money than they have been led to believe. And so we’re all suffering by this narrative. It’s not good for anybody. And so I really like to talk about what it means to be good at money. I listed some of those things earlier to broaden the scope. And a lot of times we’ll be working, sitting with a client, a woman, and having a conversation and she’s very engaged and she’s done her homework. And I’ll just sit back and I’ll say, “See how good you are this?” And there’ll be like, “What? Me? No.” And I’m like, “No, really. I’m not pandering, but I want you to know what I see. I see that you’re really good at this money thing. And let me tell you what I mean by that.”
Diane: And then I will tick off two or three fairly concrete examples of what they’ve just done, their behavior in that meeting. And they invariably discount what I say at first. And then I don’t let them off the hook that way. And they start to think, “Oh wait, maybe that’s right. Maybe I am good at money.” And I do it as often as I can, because I think it’s really important that we have our witnesses for our clients in this way.
Matt: Would you be willing to share just some examples of how you help communicate those concrete examples of explaining how they are already good with their money?
Diane: Yes. So we have a client who is married to a guy who always has CNBC on. Is that the channel? I don’t know that well, because I never turn the [crosstalk]
Matt: Mad Money with Cramer.
Diane: Right. Jim Cramer. And so she, and he’s an investor, he’s an experienced investor and he’s got his stock team [inaudible] and all this stuff and he’s always spouting off about his stocks and all this kind of thing. And she thinks that that’s what it means to be a good money person, a good investor. Meanwhile, we’re sitting down with her and she’s got two years worth of detailed Quicken Reports for her own personal spending and her business. And I say, “Nancy, look at this. Look at how good you are.” She’s like, “Oh no, no, look at John. He’s over there doing that thing over there.” And I’m like, “That doesn’t matter at all. Look at what you’re doing here.” And so I don’t know about you, but knowing about your cashflow, my mind is way more important than a stock, knowing the ins and outs of a particular single stock. Right?
Diane: So anyway, that’s an example.
Matt: That’s something that we really focus on at our firm is simplicity. That is one of our core values. Why do you think it is that humans in general, why do we discount all of these simple things as not important?
Diane: That’s a really good question. And of course it’s important to distinguish between simple and simplistic. And I think also, because simple as good, we don’t want simplistic, we want simple. Mark Twain, he once said something along the lines of, “If I had had more time, I would’ve written you a shorter letter.” And so, and you think about the investing world, how do you make money? You keep it mysterious, you keep it hard to access data, you make it unnecessarily complicated. And so it’s part of this structure that we were talking about earlier that has been institutionalized, that money has to be complicated to be good. And I think maybe one of the ideas, I hadn’t thought this through very much, but if you think about index funds, it’s a very simple approach. And one of the things that I tell people when we start to work together is that the dirty little secret is that it’s really quite simple. And you probably don’t even need to be that good at calculus. 90% of the investing, any good investing strategy, isn’t that complicated if you really think about it.
Matt: I know, I experience this all the time, when you tell someone you’re a financial planner, they just project that you must be good at numbers. How do you help alleviate some of those mystical things about money with your clients’ initial assumptions?
Diane: It’s really funny, this is still about numbers, but I remember during one of the recent really strong bull markets and it was probably the first dot-com bubble, when everybody was talking about investing. And I would be in line at getting coffee and somehow it would come up with somebody I was talking to that I did what I did for a living. And they’d say, “What is your best idea?” And I say, “Okay, listen, this is my best idea. What you need to do is track your spending. I want you to keep track of what you spend money on. That’s probably the single most important thing you can be doing right now.”
Diane: And they were so deflated by that answer. It never went very far because everybody has this idea that you have to sort of bob and weave and do all this fancy stuff. And so often when I meet people socially and we talk about investing, I just start to just broaden the conversation and ask them how they feel about it or if they have a lot of experience. And it depends on the situation of course. But you just start to talk about it in a different way.
Matt: Yeah. And I think that’s a really good point. Just talking about things in a different way. And so much of what we’re taught is to focus on that like how we do this? How do we maximize tax efficiency and estate planning and things like that? How do you feel like this cultural norm of us being smarter than other people has really impacted our ability to serve our clients?
Diane: Well, it’s not a bad thing. I mean, we all had to be really good and really smart at this stuff because the details matter and the calculations matter. And I don’t mean any of this to negate any of that. But it really has to be balanced. That expertise has to be balanced with empathy. And I think most people realize that being good, that level of expertise is really table stakes. And those are the building blocks that you need to be successful in working with clients. But it’s the behavioral piece that you’re not going to get very far with your plan if you don’t have a way to gain insight first of all into yourself and then also into your clients, because you could have the best plan in the world, of course, and if they’ve got some internal struggle going on that you’re not aware of, you’re not going to be very successful.
Diane: And we have a client who is extremely wealthy. She has a very solid balance sheet and she’s had a very hard time thinking about her estate plan in terms of her children, her adult children inheriting a large sum of money. And she didn’t want to give away too much, too soon. Even though she was in a position to do charitable giving. And we had a conversation once where we were talking about our first money memories and she was talking about her father, who was a preacher. And she would see him out the backdoor giving food and money and whatever they had to the less fortunate people in their community. And she remembers thinking as a little girl, “Oh my gosh, what if there’s not enough for me?” Which is not an atypical, that’s an experience that I think a lot of people have.
Diane: But once she was able to talk about it and it was just, it wasn’t like a big heavy therapy session or whatever, but she was really thinking about, “Oh yeah, I remember that.” And it broke a little bit of a log jam and she was able to move forward and feel a little bit more relaxed about this estate planning process that had felt like such a challenge to her. And so, that’s just one of many examples I’m sure many of us could in terms of how if you just let those emotions bubble up or be named or expressed, sometimes that’s enough to let the process move forward in a more healthy, easy way.
Matt: What I’m hearing is these conversations really aren’t that difficult. And even though traditionally we view the male of the household or the male clients as the financial leader of the household, that it’s really not that different having these conversations with a female client.
Diane: No. I will say that having these conversations with clients is in some ways an act of bravery because it’s not, it’s never easy to have these kinds of conversations with people because what it does is require you also to be vulnerable and that’s easier said than done. It’s very fashionable. A lot of people are talking about vulnerability these days and that’s terrific. But I think one of the biggest things is that we have a saying that we like to say that we need to be listening without fixing. And what are we? We’re financial planners. We always want to have a solution. But at least at the beginning, the idea of listening without fixing is something to think about. What we mean by that is you just listen. You don’t judge, you don’t necessarily comment right away. You just let people say what they want to say without immediately jumping in. And just giving them a chance to express themselves. And if you’re really listening carefully, they’re going to feel seen. The other thing that we all know from our own experience is that money has a lot of shame around it as well.
Diane: And when people come to us, we could in many ways without really realizing it activate or trigger that shame. And again, we’re not therapists or whatever, but just giving clients, asking them a question, how was money in your household? What did you learn from your parents? Whatever. A simple series of questions, Money Quotient is great for that. And just let them talk. And without too much response because you don’t want them to feel judged or questioned in terms of how they feel because that just piles on the shame.
Matt: I just feel like we keep coming back to like, this is how it’s taught. We’re just so taught to get data, fix the problem and help them go on their merry way to amassing wealth or achieving financial goals. But what I’m hearing is we need to slow down and not try to fix things too quickly. Because if we do try to do that and we don’t have the full context of what we’re trying to solve, we might not be able to create change in that person’s life.
Diane: And when I say not fixing things, I really mean not fixing them. It can be difficult to sit with a client who is facing a big choice, a big trade-off choice, and we can give them all the data. But in some ways we can’t fix the problem in the way that you and I think about fixing the problem. But I will say to your point about what we’re taught, you’re right, in the CFP program, it’s all about the technical. But the truth is there are some really great sources out there, great trainings. Carol Anderson started Money Quotient, it’s now being run by the second generation, Amy Mullen. I cannot endorse them strongly enough. Money Quotient has a fantastic set … tools that you can really use. They have a very robust training process. I think the work that Susan Bradley is doing with her Sudden Money Institute is also fantastic.
Diane: I know that Amy Florian, she’s written books about dealing with clients who are grieving. I know she has some workshops. And there are other ways to get trained in this kind of thing, because I think that, you’re right, it can seem really daunting, but the truth is having this approach and having this process, adding this to your process with your clients is a skill that you can practice and you can study and you can gain expertise on. You don’t have to have had some type of personality before you jump into this kind of thing. These tools are really quite useful in this regard. If you want to go in this direction.
Matt: Every person that we interact with has their own set of experiences. So it’s not like you’ll ever be perfect at this. Right?
Diane: But you get to be imperfect, because you’re a human being. We get to show up as ourselves when we do this, we may think that we need to be perfect because of all that technical stuff, but we do get to bring ourselves as who we are as people. And I think with this pandemic going on, and everybody doing Zoom calls, one of the real benefits is that we get to be more of ourselves and it has to be accepted because it has to be accepted. Because that’s what we’re dealing with. And I think it’s wonderful. If you’re asking a client to reveal something about themselves, you may in the process reveal more about yourself as well. And that’s something that, that’s where vulnerability comes in and the idea of being authentic. And I’m not talking about blabbing all your stuff. It’s not about you, of course, but it’s amazing how revealing something of yourself can be quite helpful to the client. But also that’s how you build a relationship. That’s how you connect with people.
Matt: Yeah. And it’s something that we’ve been talking a lot about in our firm recently is the difference between solving problems and presenting solutions. I guess in your opinion, how would you describe the difference between those two things? Because I’m hearing a lot of that in what you’re saying.
Diane: Well, so for example, let’s just take something like the longterm projection. So we use NaviPlan. And for a lot of our clients it comes down to having to spend less money. Or there’s some, it’s not sustainable over the long run. So you and I know that there are a bunch of ways you can solve that. They can spend less, they can make more, they can buy less house, they can solve it a bunch of different ways. And I used to have the idea that I had to figure out the best way for that to work. But the truth is I didn’t know the best way because the best way was a function of their priorities and rolls. And so even though they have to decide what their preferences are, it really is their decision to make. And sometimes it’s hard. Whether it’s reducing their spending or not gifting as much or whatever it might be. But sometimes it’s their set of trade-offs to decide about.
Matt: Would you say just by presenting multiple solutions and explaining the pros and cons, we’re eliminating that potential to project that shame or to project that fear in our clients?
Diane: Yes. And to the point of shame as an example, let’s say we have clients who are overspending and all they have to do is just spend less money. And we say to them, “Oh, well this all works out if only you would just spend less money.” And now I bet we don’t say it this way, but if you say, “The solution is for you just to spend less money or to reduce your spending.” Or however we say it. That is really in some ways a judgment, because they probably like spending the money that they spend and it’s really for them to consider the trade-off. So it has to do with language and positioning and not in the delivery of the trade-offs, not discounting how important this stuff is to them.
Matt: Yeah, and I mean, we see it all the time, like the classic like Starbucks is ruining your retirement judgment headline.
Diane: Right. Exactly. Totally.
Matt: How do we, as planners, start to make that breakthrough? How do we start having conversations in everyday life to explain like, “Hey, that’s not what this is all about.”
Diane: It starts with ourselves. It always starts with ourselves. And I think that expanding your own thinking about it is important. But I’m going to go back to the Money Quotient tools that I keep talking about. Amy did not put me up to this. I don’t know Amy that well, but my colleague Lexi did the training and we rely on those tools heavily. I think that immersing yourself in something like that, which is a way to think about things in a completely different way, in a fairly in-depth way and to even just get the language around it. Sometimes it’s hard to know how to even articulate it. And if somebody has already done a really great job of articulating that, it’s a great place to start.
Matt: So ultimately it’s our responsibility as financial planners to create an environment for change to take place. And I think what you’ve been saying is the way this industry was built isn’t necessarily fit for how our clients are actually feeling. Could you just explain like how we go about facilitating that change?
Diane: It’s interesting to consider that a structure or a system was at one point designed by a series of events or decisions and a design, a starting point. And so, one of my favorite terms that I’ve been learning more about lately is the idea of coated patriarchy. And coated patriarchy is really just a reference to the fact that in so many aspects of our life, what we consider the neutral or the starting point, or the starting point for any sort of new idea or new development is essentially a white male starting point. And so you think about a car, a car was developed around a certain size male body. Or you think about NASA, pretty famously recently, there was going to be a space mission where it was just women astronauts, which is a pretty cool thing, right? This was just six months ago.
Diane: And the problem was the mission had to be delayed because it was discovered that none of the existing NASA spacesuits fit any of the women astronauts because they were built for male bodies. And so, it never occurred to anyone that maybe the spacesuits had to be reconfigured to fit a broader population of astronauts. And so when we think about the financial services industry, it really was designed and created and meant to serve a particular set of people. And that particular set of people was typically white men. This is just the narrative of how things have developed in our civilization and it goes back historically quite a long time.
Diane: And so wouldn’t it be interesting to think about designing something from a different starting point, designing something from a different set of assumptions, a different set of priorities, a different set of values or at least to examine what are those things that constitute a starting point?
Matt: I think that’s so interesting, especially given the recent developments in the past, I want to say five years even, surrounding conversations about traditional gender roles and I mean the proliferation of women coming into the workplace. And I mean, there’s still other issues behind that like gender pay gaps. So what role would those things play not just in where we’re going forward, but how financial planning has been, coming from that genesis point like you were talking about?
Diane: In some ways you want to throw the whole thing out and start a new. And that’s not really practical or possible and it’s not going to happen. And so I think that it just takes, to be honest, it takes leadership from the top. It takes people to recognize that these things are important and they’re actually good for everybody. The truth is to the extent that there’s a pay parity and gender diversity in organizations, it’s good for everybody, male and female. And so it’s not an either or. It’s just better for everybody. And so you need somebody to really champion that.
Diane: And there’ve been a lot of excuses. The pipeline, the pipeline, the pipeline. But the truth is if there’s commitment at the top, it tends to happen. And we have a good example here in San Francisco. Marc Benioff, the head of Salesforce. He just decided that they were not going to have a pay gap in their company. So they’ve done a tremendous amount of work in recent years, and they continue to monitor it, so that there aren’t these pay gaps that so much of the rest of the working world has. You just need somebody to really take it seriously and champion that.
Matt: Just to wrap things up, what is the one big piece of advice that you would give new financial planners coming into the profession? How can they be that champion of change like you were talking about?
Diane: I’ve already talked about the different trainings that you could take. I think that, as I said before, we can’t change anything in the outside world until we take a look at ourselves. And I think that the idea of whatever type of self-examination or self-inquiry you want to do, that’s always a good thing. I think one of the most important things to cultivate to be successful is curiosity, true curiosity, and to have a curious mindset. And you have to just keep practicing that curiosity. I do have one of the favorite books I’ve read recently, Brene Brown, she’s a Texan.
Matt: Love her.
Diane: I think she’s in Houston, right? In any case, she’s written a lot of stuff, but I recently read Dare to Lead. I think it’s fantastic. I think it’s accessible. It’s not overly woo-woo. Not that there’s anything wrong with that. And she does a really great job of … she’s got one foot in the practical world and one foot in the aspirational world and she’s fantastic, inspiring, educational, all of the above. I think that would be a good place to start.
Matt: Awesome. I love Brene’s material and her TED talks are fascinating. So thank you so much, Diane. It was great to catch up with you. Great to catch up with the fellow Badger.
Diane: That’s right. Go, Badgers.
Matt: Yeah, go badgers. And it’s this lovely pandemic that we have on our hands. So, I hope you continue to stay well and hopefully it won’t be too long until we catch up again.
Diane: Thanks, Matt. It was really fun to talk with you. Thanks a lot.