Andrew Goodwin intertwines the intricacies of pinball with a successful financial journey in his latest article for Professional Adviser…
At the risk of making yours truly appear irredeemably ancient, it’s time to discuss pinball. As some readers may recall, this was a popular pastime in the long-ago era before Space Invaders and Pac-Man broke the mould.
I have in mind two questions. The first: What’s the key to playing pinball well? The second: How do pinball skills relate to the effective delivery of financial advice? Bear with me as I try to come up with some answers…
We probably ought to begin by winding back to 1976 and a court hearing in New York. It was in this setting that the city’s decades-long ban on pinball, enforced under anti-gambling laws, was finally overturned.
The hero of the hour was author and pinball ace Roger Sharpe, who nervelessly fulfilled a pledge to pull off a specific shot on a specific table in front of a watching courtroom. His feat convinced the local council to legally classify pinball as a game of skill.
Despite this epochal triumph, most people still have little concept of quite how demanding pinball really is. They appreciate there’s merit in sending the ball into bumpers, up ramps and so on, but they think the mere act of avoiding “draining” for a while is sufficient to rack up a big score.
This assumption is sadly mistaken, because excellent pinball isn’t the stuff of aimlessness or a glorified endurance contest. At its peak, the game actually involves achieving an intricate series of goals.
These can take a fair amount of working out. The greatest designers and programmers have invariably employed sequencing, rule sets, “grace periods” and other nuances – which is why the best tables have always instantly grabbed attention yet required patience and understanding to master.
For example, anyone might somehow execute a tough shot every so often. But it’s likely that doing so will earn oodles of points only if a number of other targets have first been hit in order.
In other words, just thrashing about and hoping to get lucky won’t cut it. Ultimately, it’s vital to know what you want to accomplish and how to go about it – which brings us, neatly enough, to the world of financial advice.
Short-term mindset dominates
The unfortunate reality is that many individuals’ comprehension of money matters is every bit as limited as their grasp of pinball. In a lot of cases, frankly, it’s likely to be even worse.
After all, show someone a pinball table and they should very quickly realise the most basic objective is to save the ball from exiting the playing surface. But how many believe their most fundamental financial task is to save for the future?
Sadly, the tendency to spend rather than invest remains widespread. The notion of adopting a long-term view and steadily accumulating assets is anathema to a sizeable proportion of the population. A short-term mindset dominates, leading to the endless racking up of liabilities.
Political incompetence and economic uncertainty don’t help. They foster apathy and even fatalism. Would-be savers could be forgiven for thinking they don’t actually have anything to save for.
But the fact, of course, is that they do – and our job is to help them recognise as much. We need to encourage them to fully embrace the benefits of saving and, just as importantly, planning.
It’s in the latter respect that the pinball parallel is perhaps most striking. Like the road to “wizard mode” – as they say in silver-ball-worshipping circles – a rewarding financial journey isn’t characterised by randomness and chance.
It’s instead characterised by incremental steps. It’s characterised by the identification and ticking off of milestones. All being well, it’s characterised by a steady progression of minor victories that gradually build towards what can be considered genuinely meaningful success.
So how do we convey this to clients? In particular, how do we get the message through to those who haven’t yet accumulated significant wealth?
Since pinball tables are nowadays few and far between, an eye-opening demonstration of flipper-pounding prowess seems out of the question. So why don’t we simply try focusing on what matters?
I know there’s a good deal of merit in talking about markets, themes, fund selection, portfolio construction, benchmarks and what have you. Yet what counts most of all is a client’s sense of how their financial journey should pan out over time – their underpinning idea of where they want to go and how they intend to get there.
This is the topic, the thinking, that should be at the heart of the vast majority of adviser-client conversations. As we used to say in the amusement arcades all those years ago, the rest – at least relatively speaking – is just balls.
Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’
