Financial Therapy: Transforming Wealth Management with Jonathan Steele

Join us as Jonathan Steele, Chief Investment Officer and Managing Partner at One Wealth Advisors, delves into the transformative power of practicing financial therapy in your advisor strategy. With over two decades of experience in portfolio theory and behavioral finance, Jonathan reveals how integrating mental health into financial planning can revolutionize client relationships. Discover how he uses principles, like Maslow's hierarchy of needs, to focus on individual well-being, transcending traditional wealth management approaches.

Jonathan emphasizes the profound connection between mental and financial health. By fostering deep, empathetic dialogues, financial therapy aims to alleviate anxieties and identify the positive impacts money can have on life. 

This episode promises to redefine your understanding of wealth management, highlighting the significance of truly listening to clients. Learn how Jonathan and his team build meaningful connections that go beyond numbers, and explore how addressing the root causes of financial stress can lead to peace and financial security.

If you'd like to learn more about the show, have a topic or speaker to suggest, or would like to leave us a comment, email podcast@cfa-sf.org.


This podcast is produced by CFA Society San Francisco, a not-for-profit professional association, providing professional learning and career resources to over 13,000 investment industry professionals worldwide. To learn more about CFA Society San Francisco, visit our website or connect with us on LinkedIn.

The information contained in this podcast does not constitute financial or investment advice. Please consult your own financial advisor for information concerning your specific situation.

Transcript

Lindsey Helman: 0:05

Hello and welcome to Financial Perspectives, a CFA Society San Francisco podcast where we interview and discuss trends with leaders from across the investment and finance industry. This month, our host, Tanya Suba-Tang, Director with CFA Society San Francisco, had the pleasure of speaking with Jonathan Steele, chief Investment Officer and Managing Partner at One Wealth Advisors. Listen in as they discuss practical implementation of financial therapy and wealth management.

Tanya Suba-Tang: 0:40

Hi, jonathan, welcome to the show. How are you today?

Jonathan Steele, CFA: 0:43

I'm doing well. Thanks for being here.

Tanya Suba-Tang: 0:45

So, jonathan, you are a managing partner and CIO for One Wealth Advisors and you have well over 20 years of expertise when it comes to portfolio theory, technical and strategic assets allocation and behavioral finance, which is what we're going to talk about today Sounds great. Yeah, so what is finance therapy and why do you consider it essential to client relationships?

Jonathan Steele, CFA: 1:13

Yeah, I'll actually answer that in two parts. First, I'll think about where I'll answer. What is finance therapy? And to me, finance therapy is like any other therapy.

Jonathan Steele, CFA: 1:22

I think the finance therapy simply is helping somebody or a group of people live happier and more peaceful lives, and this can obviously mean so many things to so many people. So it does require flexibility on the advisor part, and it also requires flexibility on the client part so they can work together to a common goal. And it's also important to note, in my opinion, that this type of relationship is a deep and sensitive request and it can also require a lot of time and, importantly, a personality fit to break ground in this area. So you need to give space for that as well. But if the advisor is keeping happiness and peacefulness in mind, it helps to keep the advice on track, and even if it takes a long time to break the ice, it's going to get there over time.

Jonathan Steele, CFA: 2:03

And then you asked about why is financial therapy essential?

Jonathan Steele, CFA: 2:06

In my opinion, mental health is essential and financial health is part of mental health, and so financial therapy can help with mental health and, personally, for me, it's essential because it's developing the type of relationships that I want to have in my life that are deep and fulfilling, and as a business, we want to have those types of relationships as well.

Jonathan Steele, CFA: 2:27

So it's important for my team to also feel fulfilled by having those deep relationships. But as it relates to a client, the therapeutic component of a client relationship is essentially just like saving and investing, and it's saving and investing you're satisfying a set of goals and considering a therapeutic component to a relationship just means that you're identifying something in the client's life that it could be bringing them some anxiety. Developing a set of goals to overcome those anxieties and having an ongoing dialogue about these issues can help reduce friction in their lives, and it also can help to identify the positives of what money can bring to their lives. And what I find really interesting about financial therapy is some clients hire an advisor to try to get these moments of anxiety or these issues, these areas of friction in their lives and simply just get rid of it, and get rid of it to the advisor, and I think that's really avoiding the deeper issue. And so I think getting to the root cause of why the client may be hiring that advisor is what could lead to reconciliation.

Tanya Suba-Tang: 3:27

So I'd love for you to kind of share how you actually put this into your practice day to day.

Jonathan Steele, CFA: 3:33

Yeah, how do we do this? So you know, we do take cues from some of the authors that we read in the CFA program the behavioral finance founding fathers, dan Kahneman and Tversky, who taught us prospect theory, or moderate, even modern day academics like Sheffrin and Statman who created this behavioral efficient frontier Right. But I feel we really lean mostly on from, like, maslow's hierarchy of needs, and that just basically means satisfying base needs first and and then moving up towards self-actualization and obviously base needs are different for everybody and self-actualization is different for everybody. But we lean pretty heavily on Maslow's hierarchy of needs to implement this. But what I think is also important in our business is that we do our best work not because of our technical skills although half of our company either has a CFP or CFA designation but because we learn who our clients are as people and we listen to them.

Jonathan Steele, CFA: 4:28

But some may be saying well, you're really blazing over the important components of a financial relationship and what I would say is that it's not like we're not building goal-based investment plans for our clients. We're usually doing that first and we're introducing diversification to our clients and we're trying to implement an investment plan with some simple approach to help solve for our clients' needs. But if we get that right, it allows us to expand on more subjective matters, and it's the subjective matters that excite us. Some concepts to consider. First, love thyself. Love thyself as an advisor and then allow yourself to develop a certain amount of empathy towards others and then build that into the type of team that you're building in your company as well. Make sure that you're employing this love thyself concept within your team and they should have empathy for each other. And if I can get my team to think about these concepts and ideas, love thyself and empathy every click, every word, every conversation that they have with clients is going to get those clients a bit closer to peace and happiness.

Tanya Suba-Tang: 5:31

That's awesome points. Now, how do you handle challenges with clients who may think they want or are interested in having such an in-depth relationship?

Jonathan Steele, CFA: 5:40

Yeah, we have a North Star, and our North Star is act as a sense of coordination in people's lives to help ultimately bring them peace of mind, and I think this challenge that you mentioned is actually a wonderful opportunity, and it's an honor One.

Jonathan Steele, CFA: 5:55

It's an opportunity to develop deep relationships with somebody, something that I personally yearn for, and most of my team as well. It's a way to get to know each other better, get to know people better, and sometimes I bring my own baggage into the conversation just to help them feel a little bit more comfortable that they're not the only person in the room or the only person in the conversation that may be dealing with a particular issue, but it's not uncommon for a behavioral concept to come into a conversation that I may not have encountered, so it's a little harder for me to have empathy towards that particular situation. So what I'll do in that particular situation is bring in one of my teammates that may have encountered this in the past, whether it's a death in the family or dealing with kids I don't have kids that can help lead this conversation or help the client get a little closer to this happiness and peaceful concept that we're trying to accomplish.

Tanya Suba-Tang: 6:42

So, for our listeners interested in implementing finance therapy and thank you so much for sharing all that and into their practice, what advice would you give them to actually get started?

Jonathan Steele, CFA: 6:53

Yeah, choose your North Star. That's an easy one for me. Early in my career, I chose my North Star and I decided that this is the role that I wanted to play in my clients' lives that North Star of acting as a sense of coordination and helping bring peace of mind. And as an advisor, somebody entering into the business, or if you've been in the business for 30 years, who do you want to be in the world and who do you want to be in our profession? We've been given an extraordinary opportunity to make a difference in people's lives. Does that mean to you that you are bringing stock ideas or investment ideas to your clients? That's awesome. But if you're doing this, what is it that you're doing to help make the clients happier and more at peace? I'd focus on that. But if you've chosen the path more like ours, then first look within to try to address any personal anxiety that you may have had through personal relationships and particularly as it relates to money, and then practice on yourself and with your team.

Jonathan Steele, CFA: 7:48

Practice what you preach. I think that's really important at home and with your team. At OneWealth, for instance, each team member is required to have an advisor to help them. It's a requirement in our company. This could mean developing personal checkpoints, financial checkpoints like making sure you have a will, trust and estate plan named, proper beneficiaries, or simply a diversified portfolio. But then look within to see what makes you happier or what brings you anxiety, and is there anything related to money that needs work, and ask for help around you. That's the reason why we have such great people in this business. So practice what you preach within the company and at home, and then, importantly, surround yourself with people that are loving and caring, and I do mean at home and on your team.

Jonathan Steele, CFA: 8:27

We spend so much time with our team, and if you can control the hiring process, I strongly feel that character and personality matters, not just technical skills. Then have your team, like I said, focus on self-realization of what makes them happy, or maybe the things that bring them anxiety and help them work towards a common goal of achieving happiness. And lastly, when it comes to clients, though, how to implement this, consider some basic best practices in investing. These are the approaches that we all learn in the CFA program, like risk-based investing and diversification, but try to do this at scale within your business, building a process that allows you to monitor plans, monitor allocations and monitor investments across your entire client base. Then hire people or have a team or people on your team that are excited about the technical aspects of the investment process and have them manage the scale.

Jonathan Steele, CFA: 9:19

Once you can do that, then you personally can pivot towards developing a deeper understanding of your clients and families. Learn about what brings them happiness. Like I said, you'll see this common theme of happiness and peace of mind. Learn about what brings them anxiety and help them reconcile those issues that they may have, and my guess is that you've seen a lot of these issues before you as the advisor, somebody on your team. How do you address these issues? How did you address these issues in the past? How did they address the issues? And remember who are you trying to be in the world for your team? Who are you trying to be in the world for your clients? And I feel, no matter the circumstance, you can identify a way to help somebody and after helping them, you're going to feel really fulfilled that you took this approach of financial therapy.

Tanya Suba-Tang: 10:00

Jonathan, thank you so much for those great takeaways. I know our listeners will appreciate it. It's been such a pleasure talking to you and really learning more about finance therapy.

Jonathan Steele, CFA: 10:09

Thanks for having me.

Lindsey Helman: 10:16

Thank you to this month's guest, jonathan Steele, for sharing his best practices on implementing financial therapy and wealth management and client relations. Join us next time for another Financial Perspectives episode airing on the last Tuesday of the month. Want to receive a shout out in the next episode or share your thoughts with us? Send in a message to the show through the link at the top of each episode description, or email us at podcast@cfa-sf. org. We love hearing from our listeners and look forward to learning what you thought of this episode and any topics you'd like for us to cover next. Thank you for being a dedicated listener.

Lindsey Helman: 10:57

This podcast is produced by CFA Society San Francisco, a not-for-profit professional association providing professional learning and career resources to over 13,000 investment industry professionals worldwide. To learn more about CFA Society San Francisco, visit our website at cfa-sf. org or connect with us on LinkedIn.