When I played basketball back in high school, my coach frequently talked about two kinds of errors: errors of commission and errors of omission.
Errors of commission usually showed up in the box score and included things like committing a foul while going for a rebound, making a bad pass while trying to get the ball to an open teammate, and missing a shot while trying to beat the clock at the end of a quarter. Coach said that these kinds of errors were forgivable because they occurred while trying to make something positive happen.
Errors of omission on the other hand transpired as a result of not doing something. They rarely showed up in the box score and included things like not working hard during off-season conditioning, not going to bed at a decent hour the night before a game, not going for a rebound, not telling a teammate a screen is coming, and not being in proper defensive stance to stop an opponent from scoring. Errors of omission always made coach angry. During film sessions, coach rarely mentioned errors of commission, but he would rewind the tape over and over to show errors of omission and demand explanations. These errors occurred because of a lack of effort or awareness, and coach deemed them unforgivable.
What do old high school basketball memories have to do with financial wellness? Let’s fast-forward to today. Are your clients’ and future clients’ current states of financial wellness caused due to errors of commission, errors of omission, or both? Let’s face it, if no one made any financial errors, everyone would be rich, and advisors would not be needed.
Errors of commission might include strategies that over or underweight stocks, bonds, or cash in portfolio balancing, selling a position too soon, and buying an asset based on chatter heard at a party. While sometimes costly, these errors are made while trying to make something positive happen. These are the kinds of errors that very likely will show up on your clients’ (and in turn your) box scores. Fortunately, with discipline, these kinds of errors can be improved upon.
What are some errors of omission that might not show up in the box score but cost your clients dearly? Some very common ones include not contributing to a company 401k plan up to the match percentage, not putting enough annual money into a 529 plan to earn your state’s full tax benefit, not paying down high-interest debt as quickly as possible, not investigating the loads placed on various funds, not investing at all due to fear of not knowing what to do, and not asking questions for fear of looking foolish. Notice that in the errors of omission in both the basketball and investing scenarios, I started each example with the word “not.” When the quarterly statement comes out, it will never show how much of a match could have been earned, tax deductions gained, fees and interest saved, hypothetical profit made, or questions answered.
Fear and lack of knowledge leads to paralysis, and this paralysis creates errors of omission. Your clients want a financial professional who can quell both fear and lack of knowledge. Beyond investments, taxes, mortgages, estate planning, or simply helping with budgeting and credit counseling, clients want industry experts who are solid communicators, behavioral scientists, financial mentors, motivational coaches, and overall wellness gurus. It’s one thing to say you possess these traits. It’s another to have the certification to back it up. Some of the greatest minds in wellness, finance, and consulting have collaborated to develop the Foundation for Financial Wellness’s Financial Wellness Professional Certification™ .
Engaging in the Foundation’s certification training will unlock seven modules with a multitude of courses and chapters inside each. The modules cover topics like behavior change, counseling and coaching, facilitation, and education. Participants will also get access to the Foundation’s world-famous 5 Essentials for Financial Wellness™ curriculum. Upon completion of the program, an exam allows the practitioner the opportunity to show competency in all aspects of financial wellness. Pass the exam and receive a certification mark that will show both current and future clients that your practice goes beyond analyzing the market and making recommendations. You care about the overall wellbeing of everyone with whom you encounter. The certification program caters to the busy professional. Approximately 20 hours of coursework can be completed at a go-at-your-own pace prior to taking the certifying exam.
Once certified, you will join a community of like-minded wellness professionals and have access to world-class livestreams, videos, and curriculum curated by the Foundation for Financial Wellness. Annual continuing education requirements for certification renewal provide further opportunities to show your commitment to the wellness of your clients.
Help your clients make the game-winning shot by helping them eliminate both errors of commission and omission.
For more information and to enroll in the certification program, visit https://foundationforfinancialwellness.org/certified-financial-wellness-professional/. We are a not-for-profit entity, looking to make a difference in the world. Learn how to Handle Life (and money) Better.