I have been blessed over my 37-plus years as an investment advisor to have worked with some very smart people. It is invigorating for me to show up for work each day to improve the investment management decisions for my 401(k) advice clients.
Most of my 401(k) advice clients are satisfied with my “what to buy” company 401(k) mutual fund answer. Some of those same clients need to know “why.”
For the first time in my career, I have noticed elements of the imposter syndrome creeping into my client and prospect conversations. It is another element we can blame on working from home due to the COVID-19 virus.
From what I have read and heard, the imposter syndrome occurs when an individual doubts their talents and skills. They fear being exposed as a “fraud.” Despite their academic and career achievements, these individuals feel like they do not deserve their financial achievements.
In the individual 401(k) investment advice business, the feelings of not deserving the tremendous growth of company 401(k) accounts over the last few years is common.
“I have no idea which company 401(k) mutual funds to own. I just guessed. How on earth has my 401(k) account balance gone up so much in value over the last few years?”
Self-doubt. Lack of confidence. Surprise in the results. Fears of losing what you have or being embarrassed in the future. All these elements are present in the 401(k) Imposter Syndrome.
I am no psychologist. But I have learned the hard way that I try to help my individual 401(k) advice clients think about the last few years of their company 401(k) investment performance success in an unusual way.
I add outside context to my clients 401(k) investment management success over the last few years. Their “buy-and-hold” investment management success has been the right formula for all-time stock market highs and all-time interest rate lows.
I do remind my individual 401(k) investment advice clients that the same “set-it-and-forget-it” investment management strategy is not likely to preserve the last several years of 401(k) investment gains in the future.
More importantly, that same investment management strategy is not going to preserve the last several years of personal 401(k) contributions and company-matching contributions.
My individual investment advice clients are at the top of their chose professions. They are at the peak of their professional careers. They are highly qualified to make timely and intelligent investment management decisions regarding the preservation of their 401(k) account balances going forward.
The logical, disciplined, and organized stock and bond mutual fund selection tools that were successful in building their all-time high company 401(k) account balances can also be employed successfully to limit downside stock and bond market losses.
No stock and bond market risk-management investment strategy is perfect. But having a 401(k) principal preservation plan in place now is a good start.
I read somewhere that people who suffer from imposter syndrome should avoid comparing themselves to others. Instead, they should focus on their own set of unique talents and potential.
My individual company 401(k) investment advice clients have already succeeded at the hardest part of retirement investing. They have grown their 401(k) accounts to near all-time high account balance.
For the remainder of their working careers, all they must do is to maintain an investment advice relationship with an independent, third-party, fiduciary-level investment advisor.
Ric Lager
Lager & Company, Inc.
