In 2009, I wrote an article called “Financial Clutter,” which is a term I coined after dealing with many financial planning clients, as well as potential clients who shared a common malady. Each had so many bank accounts, investment accounts, 401(k), 403(b) and 457 accounts (many from former employers), IRAs, Roth IRAs, insurance policies, and or alternative investments, that they could not even remember all of them without referring to documentation.
The concept of financial clutter came from time I spent as a management consultant in my father-in-law’s firm in the 1970’s. One of the first, and certainly one of the most memorable concepts, my father-in-law demonstrated to me was the simple truth that “organization is unlikely to emerge out of chaos.” I remember like it was yesterday when we walked into a new job in a small manufacturing company in Racine, Wisconsin, and had an initial discussion with the new owner. He was looking for an improvement in his operations, and then, hopefully improved profitability. We talked for a while, and then toured the factory (they were in the corrugated box manufacturing industry).
I was a bit dumbfounded to see and hear my boss (father-in-law) actually walk away from the job, with the admonition to the owner that he needed to clean up the factory, get organized, and then get back to us. In essence, he explained, get rid of the clutter.
Times were OK then, but they weren’t great for a tiny little consulting firm (like ours) in Manufacturing City, Midwest, USA. Taking the chance that a consulting job may be lost through his (my father-in-law’s) actions seemed truly frivolous to this young college graduate. It did, however, become a learning experience. I suppose that’s why I am even discussing it all these years later. You probably can guess what happened. A month or so later, we received the return call, with the owner claiming to have rectified his situation, as well as claiming to be still interested in our services. The designated day arrived, we walked in to his office, and then proceeded into the factory. We were stunned by the appearance, organization, cleanliness, and the general attitude of the employees, which were all greatly improved
Over the next couple weeks, we mapped out a new workflow, better productivity, and a general upgrade in the possibilities for the ongoing success for this new owner. I learned a lot.
This was far from the last lesson I ever learned about clutter. Many times, it was physical clutter, as manufacturing people were our main clientele. But, as I exited consulting and bought my own manufacturing companies, the early lessons stayed with me. Lately, in my financial consulting business, clutter is a different, equally important, aspect of personal financial planning. I stress the same principles today, just in a different arena. In financial consulting, we can manage the process of getting our clients’ finances organized and simplified, making the job even more rewarding.
In the practice of comprehensive personal financial planning and investment management, we work with people to identify, organize, and reduce their financial clutter. Most people understand that seeking help with complex subjects improves long-term results. Helping people establish and achieve their own goals is very satisfying, and we consider that one of the perks of our jobs as fiduciaries.
Formulating a coherent personal financial plan requires organization and diligence. If you feel like a victim of financial clutter, consult an independent Certified Financial Planner® for a comprehensive financial review. We can help you simplify your life, and, in all likelihood, improve your investment performance.
Van Wie Financial is fee-only. For a reason.