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Would you attend Warren Buffet’s Masterclass on financial advisory?

warren-buffet-masterclass-financial-advisory

With 1.5 million subscribers, Masterclass is all the rage recently. Popularized by personalities like Gordon Ramsay and Serena Williams, demand surged 1000% during the pandemic. From cooking to tennis, Masterclass offers budding learners an online learning experience with a veiled promise of achieving the same level of expertise if they apply what they have learnt.

Imagine this: What if Warren Buffet gives a Masterclass on your financial matters? With a net worth of $100 billion, it would seem natural for one of the world’s top billionaires to teach all things finance-related, ranging from insurance to investment. Warren Buffet’s Masterclass, if it exists, would be especially illuminating for people looking to achieve even a fraction of his wealth.

While we are not sure when and if Warren Buffet would give a Masterclass, the public has no lack of options when it comes to investor education, be it a broad overview or a discovery of some unconventional financial instruments. We are in the age of “financial wokeness”.

“The most dangerous man is one who’s read only one book”

Financial wokeness feels like financial enlightenment as one self-discovers (or do they?) the way to financial freedom and satisfaction. However herein lies the danger of being lulled into believing that what works for others will work for you.

One man’s meat is another’s poison

Laurence Peter, a professor from the University of Southern California, explained the fundamental challenge of advice “If people can differentiate between good advice and bad advice, they don’t need advice.”

Without the means to tell good advice from bad advice, these courses, even if delivered by renowned figures, may backfire as everyone’s financial circumstances and personal needs and aspirations are different. Good advice for one is irrelevant, and at worst, disastrous, for another.

Good advice must be testable. The method or metric to test financial advice must be personalized or it risks being irrelevant or misleading. For example, financial advice from early-retirement proponents will be a mismatch for someone who is not looking for early retirement because they enjoy their work.

So, who will you learn from?

If financial advice from top billionaires may not be relevant, what about learning from someone closer to home, like your mum?

Mums are often known for their razor-sharp instincts that tell them when their children are happy or hungry. They have a good sense of their children’s preferences and aspirations. Nonetheless some mums are less attentive than others. Their personal opinions tend to loom over the relationships too.

If financial advice from humans are potentially biased, what about learning from something even closer to us: mobile apps. As mobile apps are used ubiquitously, personal finance apps,  integrated with self-help planning functions, that aggregates personal financial information are surging in popularity. For example, Mint provides insights (Mintsights) and even subscription-cancellation automation to help the layperson reduce spending [1]. However Mint does not assess the layperson’s financial satisfaction, a subjective state guided by his or her ability to fulfil the multiple needs and aspirations in line with preferences such as standard of living and tolerance towards uncertainty. By excluding financial satisfaction, financial advice is reduced to a sterile list of to-do’s, and paradoxically, becomes even more impersonal.

So, who would you take financial advice from? The billionaire, your mom, or an app?

HappiU®: the personal coach

At 360F, we take the best of these options and combine them. We innovate 360-HappiU®, a scoring system that scores your financial satisfaction that works in tandem with our solutioning optimizer.

Beyond typical financial apps like Mint, we don’t just aggregate and compare the best insurance and investment products to buy. Instead, we put together life insurance and investment products in the form of optimized and holistic solutioning bundles, each auto-configured uniquely for every customer.

Important is that we build our model on the back of the Nobel Prize-winning research in behavioural economics. This enables us to make advice testable and measurable by forecasting the customer’s financial satisfaction before and after applying the financial advice. Above all, 360-HappiU® provides real-time financial coaching insights that address one’s personal preferences and priorities, motivating individuals to put their financial happiness at the forefront.

In the age of financial awakening, the layperson should not be left to sift blindly through the cacophony of financial information out there. By using technology to merge expertise and intuition with an added personal touch, self-verifiable financial advice is within reach and the layperson can be the most financially satisfied version of themselves.

Discuss more?

Drop us an eMail here: clarie.kwa@360f.com

 

Notes

[1] https://mint.intuit.com/blog/empowermint/mintsights-advice/

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