In life insurance, perceptions often conjure images of slick-haired salespeople in suits—reminiscent of a used car salesman. However, some defy this stereotype, like the CEO of Truth Concepts, Todd Langford—a mathematics and engineering enthusiast who values trust and facts, embodying the essence of his company name.
With a rich background spanning 38 years in mathematics, algorithm building, and data analysis, Todd delves into the nuanced relationship between advisors, clients, and the tools at their disposal.
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Truth Concepts: The Power of Truth in Financial Services
Dennis Yu starts the conversation with a nod to the importance of the name Truth Concepts. It is not just a catchy phrase; it is a binding term that reflects the commitment to accuracy in an industry rife with misinformation. In this context, he challenges the paradox that despite being rooted in math, the financial industry is not immune to misinterpretations and inaccuracies.
Certainty vs. Uncertainty in Financial Decision-Making
Dennis then adds that if you look at Las Vegas—a city known for an industry based on mathematical probabilities, people make all kinds of mistakes, much like financial decisions. It highlights the inherent human tendency to make mistakes, even in the face of calculated odds.
Drawing parallels with the gambling world, Todd introduces the idea that uncertainty is the spice of life. This concept challenges the notion that financial decisions should always prioritize predictability and certainty.
Then, Todd shares that his friend, Patrick Donahoe, introduced the principle of uncertainty. Rather than being the antithesis of certainty, it is a complementary element, adding excitement and opportunity. It is like riding a roller coaster but putting the seatbelt on as a safety measure.
Having certainty to protect against uncertainty in our choices in finances is paramount. Whether dealing with real estate, market investments, or other financial decisions, there are unknowns, always. A certainty asset acts as a safeguard, transforming what might seem like a gamble into an opportunity.
Dennis shares something Dick Hayen, former chairman of Allstate Insurance, told him. Dick paints insurance as a safeguard against undesirable outcomes. It is like a lottery with large negative prizes. You do not want to collect it, but it is good to know it is there.
Then, Dennis says that he views people like Todd, Kim Butler, and Caleb Guilliams as odd birds in the financial services world. He sees them as doctors, whereas everyone else is a witch doctor.
While everyone else uses primitive methods to cure people, Todd, Kim, and Caleb cure sick people with modern medicine and equipment. They can look at factual and provable data, make a diagnosis, and provide expert recommendations. There are no mystical predictions.
A Paradigm Shift in Financial Advising
Dennis asks how Todd feels knowing his calculators empower financial advisors to create measurable improvements in their clients’ lives. It is not just about selling a product. It is about becoming a trusted advisor. The calculators are not magic wands; they are instruments that reveal a clear plan for the client. The focus is on measurable improvements, not just financial gains. It is not just a sales tool—it is a life calculator.
Todd challenges the conventional mindset of merely improving a client’s financial position. Instead, he advocates for a holistic approach—examining whether the proposed plan aligns with the client’s needs and desires. It is not about fixing people but ensuring their financial path aligns with their life goals. The emphasis is on transparency and honesty rather than simply selling financial products.
Drawing parallels with the medical profession, Todd explores the difference between modern medicine and financial advising. Unlike doctors who often treat symptoms without addressing lifestyle choices, financial advisors armed with calculators have the power to guide clients through choices that align with their long-term goals. It is not about removing impediments. It is about empowering clients to make informed decisions.
Humanizing the Calculator
Dennis notes that advisors are humanizing the calculator. It is about understanding and applying the principles of finance to real-life situations. The goal is not to mystify but to empower. It is about understanding the ripple effects that financial decisions can have on individuals’ lives.
Todd emphasizes the need to break down complex concepts into simple terms. The message is clear: clients do not need to know everything the advisor knows. It is not about withholding information. It is about presenting it in a way that is digestible and relevant to the client’s needs. Simplicity is key.
Advisors need a comprehensive understanding of the financial landscape. However, when communicating with clients, the focus should be on what matters to them. Clients do not need to know the intricate details of every financial mechanism; they need to comprehend the process, the result, and how it impacts their lives.
While transparency is crucial, bombarding clients with every nuanced detail might not always be the best approach. Instead, a more effective strategy could involve presenting the results in a comprehensible manner. It means stepping back and looking at the bigger picture, considering the options across a timeframe, and determining the optimal choice.
What Financial Advisors Do Not Know
Many people approach financial planning with a mindset rooted in grade school math. Basic multiplication and addition may seem straightforward, but when applied to financial scenarios with a time dimension, the simplicity crumbles. For instance, multiplying 50 by 10 might give you 500, but if 10 represents years and you are considering an annual growth of 50 over 10 years, the calculation becomes far more intricate.
Attempting to add up financial values over time using a linear approach derived from grade school math is a common mistake. The reality is that financial landscapes evolve, introducing variables and fluctuations that cannot be captured adequately through basic addition. Time’s influence demands a more sophisticated understanding of financial mathematics.
The Human Touch in Advisorship
Todd explains that one often encounters the pitfall of unequal comparisons. Evaluating the net return of one asset against the gross return of another without delving into the myriad factors that can tip the scales.
You need to consider all components. While an asset might boast a higher rate of return, it might also come burdened with additional costs such as taxes or fees. In essence, it is a game of different playing fields. What remains after accounting for fees and taxes? Is there a unique benefit associated with one asset that is absent in the other?
Todd stresses the significance of understanding hidden assumptions, meticulously analyzing inputs and providing guidance as a trusted advisor. The true value lies not just in the tools but in the analysis. Advisors should be a reliable source for their clients.
The advisor, acting as a bridge between mathematics and the real world, brings an irreplaceable value proposition. It is not just about following pure mathematics. It is about understanding the nuances of an individual’s circumstances. Factors like risk position, family dynamics, and other unknowns play a crucial role in determining the most suitable financial strategy.
The Intersection of Math, Storytelling, and Financial Wisdom
Many advisors are wired as salespeople, relishing human interaction in the financial industry. The challenge arises when there is a division between the mathematical rigor required and the relatability of a conversation. Striking a balance is the key.
There should be a symbiotic relationship. An advisor with strong people skills and an expert crunching the numbers creates a powerful duo. This teamwork ensures that advice is personable and backed by accurate calculations. It is a delicate interplay, and individuals may be wired differently, some excelling in both aspects.
Simplifying Complexity and Prioritizing Client Relationships for Lasting Success
A central theme in Todd’s discourse was the transformative power of simplifying and prioritizing genuine communication with clients about their future. “When they switch gears and step back, taking the complication away from what they are doing and communicate with the client and the client’s future, it is like their whole job gets easy,” he explains.
The shift from being a sales-focused professional to a trusted advisor emerged as a pivotal point. “The trusted advisor instead of the sales guy,” Todd emphasizes. Success becomes natural when one genuinely looks out for the client’s best interests rather than focusing solely on commissions and personal gains.
When you are looking out for the other person’s best interest, you will get helped along the way. It is a natural thing that is going to happen. When you focus on your commission and what you will make out of each deal, you will never make it; you will always struggle until you get to a place where you are looking from the outside and focusing on the client first.
Todd Langford and Truth Concepts
Todd is arming financial advisors with the resources they need to succeed in the financial industry. If you would like to learn more about their software and training program, please visit the Truth Concepts website.
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