You’ve probably heard it said, “You don’t know what you don’t know.”
Einstein said it this way, “The more I learn, the more I realize how much I don’t know.”
The famed physicist, John Archibald Wheeler, eloquently expressed it this way, “We live on an island surrounded by a sea of ignorance, as our island of knowledge grows, so does the shore of our ignorance.”
It’s simple: Nobody knows everything.
Today, I want to dive into a concept that has been incredibly beneficial for our wealth management practice, something worth considering for your business, and absolutely applicable to your personal finances. I want to discuss the importance of the division of labor, subject matter experts (SME), and collaboration.
The Curation Age
First, let’s start with where we’ve been and where I think we are headed culturally.
I am 40 years old, and a lot has changed in my lifetime. I once had a pager, in the past I was ecstatic to simply play Snake on my Nokia cellphone, and now I have access to all the information in the world right there in my pocket.
Earlier this week, my eldest son asked me at bedtime, “Daddy, how does the internet know everything?” and I assured him that the internet only knows what man has placed there.
In the history books, we refer to this as the Information Age. Perhaps better referred to as the Overwhelming Amount of Information Age. There is simply so much out there, some reliable, some not, and many people are at a loss on (1) where to find trustworthy information and (2) what to do with it.
Artificial Intelligence seems to be all the hype these days, and rightfully so, for many reasons around efficiency and the ability to sift through the heaps of data. It seems that we are now entering the Curation Age, where success will not be determined by the amount of data one can gather, but the curation of that data for a valuable use or purpose.
The wealth management industry is no different. There is no shortage of commentaries, financial tools, textbooks, pundits, opinions, research, etc. So, what are we to do with all of this information?
The Division of Labor
The answer to this information overload riddle is solved in a book written by Adam Smith almost 250 years ago. Smith provided the simple example of a pin factory and highlighted that an individual on their own may struggle to produce one pin per day, whereas a factory with divided labor (specialization) could produce thousands.
When highlighting what differentiates The Bahnsen Group, I will often draw attention to the fact that more than two-thirds of our company are not financial advisors. That’s right, a financial advice business where the majority of the employees are not financial advisors. Why? Because of the division of labor and as our company grew, we leaned into specialization to help improve the most important part of our business: how we serve and care for our clients.
For an investor that is approaching this endeavor on their own (DIY), or an advisor operating as a sole practitioner, they are comparable to Smith’s one-pin-per-day production criticism.
The world of personal finance and financial planning is multifaceted, covering subjects on everything from investments to taxes to estate planning to insurance. This is the exact type of field that warrants the division of labor and specialization.
SME
Captain Hook’s first mate, Mr. Smee, may have had some specialized skills, but he is not the topic for this section. Here we are talking about an SME or Subject Matter Expert. In the world of specialization, you need to allow people to become hyper-focused and develop a particular expertise that will ultimately help contribute to the whole.
In my younger years, I tried to learn and know everything. I eventually realized that this was an impossible endeavor, and I started to embrace my knowledge deficiencies by leaning on an SME. It was scary, and at first I felt embarrassed that I didn’t know everything, but now I have found such freedom in leaning into those with greater knowledge than I.
Clients will often hear me say that I am conversational in the areas of tax, estate planning or insurance, but I am blessed to have a team of professionals around me with greater fluency.
Collaboration
As an NBA basketball enthusiast, I can tell you that winning takes more than great players. I could provide countless examples of teams spending top dollars to acquire top talent only to produce disappointing results. The last part of this equation is collaboration.
Years ago, The Bahnsen Group set out to build a tax department in-house. This was not an easy endeavor, and this was not a cheap endeavor, but we valued the power of collaboration and how that would impact our client service, so we did it. This takes leadership. Someone must identify talent, acquire that talent, and then skillfully plug that talent into a flourishing ecosystem, and when done right, this can be a beautiful thing.
From my vantage point, this collaboration expands beyond just internally within a company. I regularly collaborate with external partners, family members of clients, etc. Communication becomes a superpower in this realm, and one’s ability to set the right expectations.
My Advice
What I have outlined here should begin to give you a flavor for how you would see application in your own business or your own finances. You first realize that there is an incredible amount of information out there (on any topic), then you begin to divide this content into specializations, next seek out specialists, and finally, you bring it all together through collaboration.
If I could sum up my advice here, it would be simple: don’t go at this alone. Again, nobody knows everything, and when it comes to your personal finances, there is a lot at stake. Approaching this as a DIYer or even partnering with a sole practitioner, someone seeking to be a jack-of-all-trades, just seems like an endeavor destined for failure.
We now live in a world where maybe knowing the answer simply isn’t as powerful as knowing where to find the right answer.
