25 Jul Why Simple Beats Complex
Confucius was spot on when he observed that life is really simple, but we insist on making it complicated.
The financial industry is no different. There are plenty of organisations in financial services who seem to thrive on making things complicated for their customers. The asset management industry has made plenty of money over the years pushing complex investment products with high fees on their unsuspecting investors.
We often confuse complexity for effectiveness. But the reality couldn’t be more different. Some of the most important life-saving discoveries in the medical field are profoundly simple. Think of the millions of lives saved by forcing doctors and nurses to wash their hands. Think how much less healthy we’d be without the simple yet profound idea known as ‘five a day.’
The reality is that financial planning doesn’t have to be complicated to be effective. Admittedly, some of our financial issues are complex. But often complex problems don’t require complex solutions. It’s difficult to get people to buy into simplicity because it’s hard to believe that complex problems don’t require complex solutions. We all want to believe that the Holy Grail of investment sophistication exists and if we can only find the secret sauce all of our problems will be solved.
Renowned investor Charlie Munger once said, “Simplicity has a way of improving performance through enabling us to better understand what we are doing.” We could not agree more. It’s hard to put a value on the ability to understand exactly what you’re doing and why. Simplicity allows for more transparency and understanding.
Elegant simplicity is one of our key values at Tandem. Every day, we strive to help make our clients’ financial lives as simple as possible. Our clients have complicated lives. That’s often the reason they came to us in the first place. The last thing we want to do is makes things worse.
Our goal is to help you find simplicity from complexity. And we do this by working with you to clarify your goals and develop a roadmap to help you achieve this.