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Quicksand, Simplicity and why I’m stuck in the middle of Four Steve’s

It started when Kelly, who works in my office and is currently studying for her initial financial planning exams, asked me a question…

“Chris, I’m stuck on something. Can I ask you a question?”

“Sure….what do you need to know”

“I’ve read this bit on MIFID four times and I still don’t understand it. Can you help me understand?”

I stopped dead. Panic has hit. It then started to spread….

I couldn’t remember what MIFID was!

“I’m not sure Kel” I said “Let me read the segment and I’ll explain.”

I did this and panic really started to spread….

I still didn’t understand it!

Now, for anyone knows me, you’ll know that whilst I have got (hopefully) a decent number of skills and talents I’m no Stephen Hawking!

I’m comfortable with this for 2 reasons…

Number one…

I am moderately but not massively intelligent.

If you want to put this it into some perspective I reckon when it comes to cleverness I’m nowhere near Hawking but at a guess probably somewhere between Steven Seagal and Stephen Fry! (That’s a pretty broad church. I’ll let you be the judge where I sit!)

and Number two..

I think being really really smart.

‘Hawking’ smart.

Smart which is admired but not always understood…

…should be respected but continuously challenged.

I believe that the reason complexity reigns in our profession is that many of us (and I include me in this definition) have relied on people smarter than us.

We’re sometimes told that all this complexity is for the greater good.

However a lot of the history in our industry, profession or business tells us that the more complicated we make products, business models and regulation it generally speaking leads to negative outcomes.

It leads to most people (and the people who need the most help) deciding this ‘money stuff’ is too tough and not taking meaningful action.

It leads to business models (set up by really ‘clever people’) which look relatively impressive due to their perceived size and scale but are on many occasions built on quicksand.

It leads to advisers and planners making recommendations which rely on other really ‘clever people’ to manage their clients hard earned money and can lead to, at best, another layer of unnecessary charges for the client and at worst money being invested in schemes which lose client money hand over fist.

But here’s the kicker…

Many of these people are seem smarter are no cleverer than you or I.

However they do seem to be really good at making things complicated…

…Then persuading you and I they’re needed due to being able to understood a concept they made really complicated in the first place!

When I see a complex explanation of anything my instinct is to simplify.

To break it down into components I understand.

To challenge and understand the components I don’t.


Then explain the concept in it’s simplistic component parts.

I don’t always do a great job in doing this but it’s always the aim!

However the entire financial services profession seems to be stuck in the quicksand of complexity.

This may be, in part, due to legacy.

This may be political.

This may be due to the fact that without it being overly complex it wouldn’t need as many ‘experts’ (and therefore many involved in our profession prefer the status quo instead of potential career and business damaging simplicity).

The process of simplification is never easy…

When Doctor Steve Peters (a personal hero of mine, a renowned psychologist and the fourth ‘Steve’ I’ve mentioned in this entry) simplified the process of “How our brain works” into the computer, the chimp and the human he apparently received a fair bit of stick from his professional community.

They said it was too simplistic, it should be left to academics, it didn’t explain the subtle intricacies into how the brain really works.

However by using this technique he’s helped various sportsman across various disciplines achieve success.

He helped Victoria Pendelton and Chris Hoy achieve Olympic greatness.

He wrote a bestselling book which helped normal people (including me) change the way we think for the better and just do a tiny bit more with our lives.

So, back to the story…

Once I’d got my head around what MIFID was and explained it to Kelly (Using a map of Europe, a golf umbrella and a world war II poster)….

She told me she was still confused!

So, maybe my desire for simplicity is misguided. Maybe things do need to be complex…

…or maybe (and just maybe) I’m right. If we made the laws which govern our business and profession easier, the products we recommend simpler and the way we communicate more straightforward everyone would be way better off.

What do you think?

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