Who Is Brian Portnoy?
Brian Portnoy, Ph.D., CFA, is an expert in the psychology of money. He is the founder of Shaping Wealth, a coaching and content platform inspiring financial wellbeing globally. Brian’s multiple bestselling books have been published in 8 languages. Most notably, The Geometry of Wealth, inspired his current venture. He previously worked for 20 years in the hedge fund and mutual fund industries as investor, researcher, and educator. He serves on the Ambassador’s Council of the Alliance for Decision Education, is a CFA Charterholder, and earned his doctorate at the University of Chicago. Brian lives in Chicago with his wife, three kids, and a dog named Freddie. You can keep up with Brian on Twitter @brianportnoy
1) Your work is centered around the journey to “funded contentment”. Can you explain the principles underlying this philosophy?
Funded contentment is the ability to underwrite a life that is meaningful to you. It is a definition of true wealth that I developed in The Geometry of Wealth that seems to have resonated with people in part because it distinguishes being rich from being wealthy. Rich is the quest for more, which is often unsatisfying and never done. The quest to be rich often yields to the quest to be even richer. The principle of funded contentment appreciates that true wealth starts by defining those factors which bring real meaning into our lives, including connection to others, a sense of control over one’s life, devotion to work we find valuable, and some sense of a broader purpose in life. Only then do we address the financial implications of achieving those factors. Funded contentment is less frenetic and more deeply satisfying than being rich.
2) What are some of the major blindspots that most people have around money?
Our brains were not wired to make great money decisions. In fact, our brains in their current state have existed for more than 100,000 years while money is a relatively recent invention, albeit one with enormous implications for our personal emotions and social relationships. Our primary blindspot, therefore, is failing to recognize the psychological dimensions to money (e.g., investing, saving, spending, borrowing). Instead, we are taught (if at all) that money is a quantitative phenomenon and its puzzles are solved analytically. This is wrong, or at least woefully incomplete. Until we recognize that the human experience of money is deeply emotional, the attempt to achieve funded contentment will likely fall short.
3) How do you see the role of financial advisors evolving to better serve the needs of younger generations as they build their wealth?
Financial advisors have an amazing albeit underappreciated opportunity to help people achieve funded contentment. Every generation is stymied by the “financial supermarket” of complex products available in bewildering numbers. Especially for younger generations overwhelmed with the amount of choice and information at their disposal, even the ability to set clear and achievable goals is difficult. The modern advisor has a series of skills that can help people make better decisions, form sturdier habits, and achieve higher levels of wellbeing.
4) Your firm recently launched the Outsourced Chief Behavioral Officer Experience. Can you tell us more about this?
Just as investors need help making better financial decisions, financial advisors need help understanding the psychology of financial planning, including how to apply the avalanche of impressive behavioral science that has emerged in recent decades to delivering better client experiences. In response to this growing need, my team and I arrived at “outsourced chief behavioral officer” experience. It’s pretty straightforward in idea and execution: Provide advisors content, coaching, and tools that are easy to understand, easy to implement, and can have material impact on both client and advisor wellbeing. As a training tool and growing set of resources for advisors at any stage of their career, we see OCBO as solving a big industry pain point.
5) There’s a lot more information that exists now to help individuals manage their personal finances better yet the issue of income inequality across various communities still exists. What do you believe can be done to help marginalized communities to build/shape their wealth in a sustainable way?
The sources of income inequality stretch far beyond what can be addressed by even the best-designed financial literacy programs or by the best available financial advisors. That said, within the structural constraints undergirding inequality, targeted financial counseling on jobs, income, saving, spending, and borrowing can improve lives. Further, the principle of funded contentment signals that wealth can be as much of a mindset as it is number on a balance sheet. There is a big opportunity to help people frame their understanding of their circumstances, the choices they have available to them, and the best possible paths forward. Yes, there is a “dollars and cents” element to that. But there is also an element tied toward clearer understanding of what constitutes a life well lived and the role that money plays.