Dayana Kupisk, PhD, is the author of The Practical Guide to Making Wise Financial Decisions. She's also an employee development consultant and coach with a research focus on practical wisdom in the workplace. I chatted with her about her research, her book, and how financial planners can engage clients and develop practical wisdom (which she breaks down in this episode, so don’t worry). I’m excited to share it with you!
The road to writing a book about financial decisions
In her research as an employee development consultation, Dr. Kupisk conducted interviews and ran analyses to get a better understanding of how employees reason through and think about complex decisions. From that data, Dr. Kupisk developed her “PARTS model” of practical wisdom, which summarizes the approaches that employees (and people in general) take when dealing with uncertainty and complexity.
From there, she applied it to an initiative started at the School of Human Ecology at the University of Wisconsin. The initiative was designed to provide researched-backed support, information, and resources to individuals and couples on the topic of financial management. It covered financial decisions; how to make them, how to make them more equitable, and how to make the process more positive. Dr. Kupisk then created The Practical Guide to Making Wise Financial Decisions as a hands-on tool individuals could use to help them answer difficult questions, think about what was important to them, and better navigate financial challenges.
Dr. Kupisk’s book, which was designed as a workbook with a number of exercises, introduces the idea of “practical wisdom” and how readers can apply it to their current financial challenges. Of course, Dr. Kupisk shared a ton of insights into her idea of “practical wisdom” in this episode, as well as how financial planners can leverage certain exercises and research to better serve their clients.
Solving problems with practical wisdom
As Dr. Kupisk explained during our chat, “Practical wisdom is an ability to take thoughtful, intentional, and pro-social action in response to difficult or uncertain ambiguous situations.” Essentially, we use our past experiences and the experiences of others to find solutions to our problems, but only if we are able to review and be intentional with that information. For our clients, this means that they learn how to resolve financial challenges based on what they’ve experienced in the past, or have learned from others. For planners, this means using all our knowledge and experience, and then processing that information into communications and tools that are best in an individual client case.
Clients are coming to you for help, to gain some sort of wisdom, and to help them make decisions in a more educated way. Whether they’re wondering how much to save for retirement or if they can afford their next big purchase, they’re hoping to leverage a financial planner’s wisdom to improve their own. But there’s another component to practical wisdom as it applies to finance, Dr. Kupisk shared with me: emotions.
Navigating emotions and uncertainty
Money can be an emotional — and scary — thing for a lot of our clients. This makes financial challenges, or even transitions, very difficult. Dr. Kupisk’s research and her book focus on working through these emotions and fears, which can help people gain financial and practical wisdom. This is only possible, however, when people really work to process through the challenges they face and how they can get through it.
In a financial planning setting, we see this a lot in clients’ emotions and reactions. Whether clients are having anxiety about a certain financial reality, feeling emotional during a financial planning meeting, or they feel fear about a certain component of their plan, Dr. Kupisk says the best thing to do is identify the emotion and create language around it. Noticing things like “You seem anxious about this” or “I can tell this brings up a lot of fear for you” can help put a name to the “elephant in the room” so to speak, and make it easier to address it.
Another really big component — with finances in general, as well as within this profession — is the theme of uncertainty. How can people (and planners) apply practical wisdom when, at the end of the day, there are so many variables we can’t control? Dr. Kupisk believes it’s all about doing the work, building your toolkit, and building a buffer that can help your clients when uncertainty hits.
“We don't know what's going on with our clients deep down,” she said, “but we can ask the questions, give them tools and equip them with skills so that, when they need them, they have those resources to navigate those challenges.” At the end of the day, practical wisdom isn’t necessarily about practical solutions; it’s about creating confidence that your clients can, at the end of the day, get through whatever challenges they face.
What You’ll Learn:
- What “practical wisdom” means
- How to obtain practical wisdom — and if you can shortcut it
- The ways people think about and approach challenges in life
- How third-party advice and experience can help people navigate complex decisions
- Exercises that help people process complex situations
- How stress responses get in the way of a productive resolution
- Why understanding feelings about/responses to events or conversations help give direction
- How to navigate stress and emotions that come up with financial planning clients
- Questions to ask when clients have a hard time navigating decisions
- Why self-knowledge and reflection are important to transfer wisdom and support in the profession
- Questions to ask yourself that help you build practical wisdom as a planner (and person)
- How to learn from others in your field and in the profession (hint: conferences!)
In this episode of YAFPNW, we talked to Dayana Kupisk, PhD, about:
- Her book, The Practical Guide to Making Wise Financial Decisions
- The School of Human Ecology at the University of Wisconsin
- Her website, www.dayanakupisk.com
- Our recent chat with Jocelyn Wright
Want to follow her research? You can connect with Dr. Kupisk on LinkedIn.