Mark Matson is the founder and CEO of Matson Money. He is the creator of the American Dream Experience, a powerful financial education workshop designed for investors to discover for themselves what investing really is, how it works and how it can help fulfill their purpose for life.
Russ Prince: Tell me about Matson Money.
Mark Matson: Matson Money is a premier investor coaching company committed to helping families discover their true purpose for money. We provide breakthrough education, tools and coaching to help investors know what they are doing with their money, and why. Today, with over $9.5 billion AUM as of December 1, 2021, we offer ongoing financial coaching to more than 500 financial advisors who coach more than 30,000 investors helping them fulfill on their life’s purpose.
Matson Money developed the American Dream Experience to help investors understand what investing really is, how it works and how it can fulfill their purpose for life. In this two-and-a-half-day live event, participants can encounter clear, life-altering truths about economics and investing while engaging in a profound exploration of their financial future—possibly altering their relationship to money and investing in a way that can leave them powerfully pursuing their dreams.
For 30 years, Matson Money’s message about investing and economics has never wavered: empowering families in discovering their true purpose for money by transforming the investing experience leaving them with the possibility of freedom, fulfillment and love.
Prince: What are the biggest mistakes investors are making right now?
Matson: Today investors are barraged by a myriad of do-it-yourself—DIY—trading platforms and investing apps as well as being inundated by the media with advice and compelling headlines about must-buy stocks and hot trends like crypto currencies.
These can readily influence an investor or a money manager to make the all-too-common mistake of trying to predict the market, which can take the form of stock picking, market timing, or track record investing—or all three. The truth is that anyone looking to use performance history, predict the future, or pick a “winner” is merely speculating and gambling with their money. No one would take their life savings to the track or casino to bet, but that’s what they’re doing when they’re making a prediction about the market. This can be a costly mistake, especially considering what’s at stake could be the financial future of their family.
With rising inflation, economic dislocation and escalated concerns surrounding Covid-19, investors are experiencing amplified concerns about their portfolios. This can cause investors to succumb to any number of investor biases, which can distort their judgement and lead them to make an impulsive emotionally charged decision. For example, succumbing to herding bias, where an investor panics, gets out of the market, and goes to cash at the first sign of a “crash” as they perceive that’s what everyone else is doing is a mistake that can lead to locking in losses.
Ultimately, investors need a financial coach who understands the potential impact of making these investing mistakes and succumbing to these biases. They need someone who knows how to construct a diversified portfolio with the appropriate risk/return tolerance and can guide them to make choices aligned with their pre-determined long-term financial goals.
Prince: How are current industry trends impacting the independent advisor, and what can they do to continue to better serve clients and grow their businesses?
Matson: At the forefront of challenges facing independent advisors is the increasing threat of robo-advisors and do-it-yourself trading platforms, which continue to commodify the industry by automating services—even going so far as to make them free—that in the past could only be provided by advisors. From the largest global financial services companies to Silicon Valley start-ups, a myriad of direct investing products are being launched and luring investors to invest on their own.
For advisors to thrive in this rapidly shifting environment, they need to be more than just asset allocators or financial planners—they need to demonstrate superior value by providing a distinct type of service and by creating unforgettable investing experiences—neither of which can be replicated by technology and robo-advisors.
A means to achieve this is for an advisor to implement financial coaching—where they are trained and developed in the application of academic investing principles, behavioral science and coaching as a means of empowering investors to be disciplined and prudent throughout a lifetime of investing. Financial coaching allows advisors to coach their clients to spot biases, resist negative emotions, stick with their financial plans and help avoid destructive behaviors such as stock-picking, market timing and track-record investing that could compromise their futures.
Advisors can also lead group events to create an unforgettable investing experience. Through these events, investors can learn about an academic science-based investing methodology, discover how to spot their biases, and potentially avoid these destructive behaviors. At the American Dream Experience, for example, investors can alter their experience of investing, be empowered to discover their true purpose for money, and learn how a life-long relationship with their financial coach can be an access to fulfilling their life’s purpose.
Without a doubt, given the next evolution of the financial advisory industry we’re seeing, the independent financial advisor must transform their model, or they’ll become extinct. We believe we’ve seen how advisors adopting a financial coaching model, along with implementing impactful investor events, can make the difference for the future of their business.
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