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I was fired recently by an 83-year-old client of two years. He felt that I, as his financial advisor, didn’t understand that he wanted to be aggressive with his portfolio and that I was not focused enough on making him money.
Although I was confident I’d given him exemplary fiduciary-grade services, he and his wife ghosted without an exit interview. The nature of their departure bothered me, and I couldn’t help but think, they’ll regret this move.
A health scare and recovery
We’ll call this couple Brad and Betty.1 They hired me shortly after the start of the pandemic, right when Brad’s health began failing. There was a reasonable expectation of a quick decline and transition of control/ownership to Betty, who was anxious about the complexity of the family finances.
Brad’s priorities as the CFO spouse were clear: Make sure Betty is taken care of. Betty was similarly straightforward with her priorities. With various blended family complications and step-kids—one chronically financially dependent—she wanted their finances to be simplified.
Brad fancied himself as a successful do-it-yourselfer, a captain of his own financial ship. Over the last 40 years, he’d built a sizable portfolio based on stock market investments, paired with patience, discipline, and time.
While I agreed with the family and Brad’s lawyer and doctors that there was no evidence of cognitive impairment, his failing health and age changed his DIY approach. After years of dismissing the idea of professional advice—legal, tax, or financial—he now admitted his situation required expert guidance.
Our two-year partnership was productive. We reduced risk in his investments and simplified his cash-flow management. We also planned ahead for various scenarios: What if Brad, or Betty, became unable to manage things? We mapped out who—both family members and professionals—would need to step in and handle specific responsibilities.
Despite our progress, Brad was unable to accept any future realities where he wasn’t in charge, and that other decision-makers might not do things exactly as he hoped. This resistance ultimately ended our professional relationship, likely harming his family’s financial interests.
When his health unexpectedly improved, he abandoned all talk of taking care of Betty. Instead, he doubled down on risky security moves, making headline-driven choices that contradicted his stated goals.
Temporal discounting and the inability to see “Future Brad”
I’ve talked about temporal discounting before, the all-too-common challenge of imagining and empathizing with our future selves—a foundational element of procrastination that increasingly impacts us as we age.
I suspect that present-state Brad had difficulty accessing “Future Brad,” a future self that was likely to be in materially different circumstances. When he was sick, he was always going to be sick. And when he was healthy—both before his illness and after his recovery—it was too much of a leap to imagine a different future state that was sufficient to change behavior or engage in difficult choices.
Many professional advisors of different disciplines—medicine, finance, law, etc.—employ hypothetical scenarios to focus patients or clients on a range of possible outcomes to improve near-term decision-making.
The more realistic the scenario, the greater its impact. Scenario-building takes aim at ambiguity aversion, our increasing tendency to avoid uncertain scenarios as we age. Research has shown that older adults are more prone to ambiguity aversion, both in terms of risky and ambiguous choices.
In my work, I’ve seen how ambiguity aversion consistently shows up as an element of age-related procrastination. I address it with statements like:
Let’s identify and name the unknowns that can’t ever be certain and that will always be ambiguous. Such as when we might die, what the stock market will do in the next three months, what the next Black Swan event will be, etc.
After identifying and naming in writing our ambiguous fears, we next rally around the best decisions based on the info we have or we can get.
When the scenarios all represent what I call “unpreferred outcomes,” this approach to scenario-building and addressing life’s ambiguities can be insufficient. That was the case with Brad. I recognized, perhaps a bit too late, that Brad’s limitations in imagining his future self—a self that was, to him, nearly unrecognizable. My techniques to address temporal discounting were insufficient.
While temporal discounting has been, and continues to be, a useful tool for decision-making around aging, if I had a single do-over, I would have focused my work with Brad on regret and ideas around managing future regret.
Managing future regret
Some relatively new work in psychology tells me I’m on the right track with what I think of as procrastinaging, especially in the case of Brad and Betty.
In a 2021 study published in Frontiers in Psychology, researchers examined regret and other emotional reactions stemming from both action and inaction. The studies demonstrated that a forced choice, regardless of whether the decision-making resulted in action or inaction, caused stronger feelings of regret than if the choice was free.
In the case of Brad, all the choices he faced during his illness about his declining abilities and eventual end-of-life needs felt both unwelcome and forced. This likely caused a great deal of anticipatory regret.
The paralysis of poor options
With that said, I’ll acknowledge a “No Duh” preemptive conclusion.
Of course, contemplating our mortality decline is unpleasant, to put it mildly, and people act weird. Denial, anger about the circumstances, self-blame, and guilt all mix together in the mental soups that keep us from making good decisions as we age.
I’ve come to believe that understanding regret might be enormously important as we manage our aging selves, perhaps much more than what financial advisors and other professionals currently recognize.
As I’m incorporating emerging research into my thinking, I’m reconsidering how we approach advice for aging and decision-making. A professional focus on “acting vs. inaction” (and all its bad consequences of inaction) might be missing the point. The same goes for the emphasis on creating compelling calls to action.
If an individual is experiencing a forced choice, where all outcomes seem terrible compared to a perceived past or present state, either taking or not taking action makes little difference. Neither offers relief from regret.
For me, and hopefully for you, that’s kind of a big deal.
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1. Names and identifying details are always changed to protect client confidentiality.