“It’s not the plane, it’s the pilot”

Feel free to reach out to PSG Wealth adviser Carina van Rooyen directly.

It was only when I watched the film the second time around in the comfort of my own home, that Tom Cruise’s (aka Maverick’s) line “It’s not the plane, it’s the pilot” caught my attention. In the financial planning industry we operate in, the importance of investor behaviour is a well-known fact. Behavioural finance has become a study, utilising psychology to analyse investor behaviour. You may be shocked to learn how many people base their financial decisions on emotions, rather than rational thoughts.

Just as flying requires a specific skill set and experience, so do financial planning and managing investment portfolios. In many ways, navigating your investment portfolio is remarkably similar to flying in an aeroplane. In all likelihood, most people would feel much more comfortable with a trusted and an experienced pilot flying a plane they are travelling on, than attempting it themselves. Why should managing your investments be any different?

I am most certainly not a pilot, but (partly thanks to the Top Gun films, I might add) understand a few basic concepts about flying. Before any flight, a flight plan must be submitted. The plane must be filled with fuel. A pilot with the required number of flight hours and knowledge must be in charge of the aeroplane. When the plane experiences turbulence mid-flight, seatbelts must be worn. Finally, the destination must be kept in mind.

The more I thought about it, the more the analogy between flying and managing investments made sense:

• The process of financial planning starts with exactly that – a plan. Having a conversation with a financial adviser about your plans, needs and dreams, it is important to determine what your goals are and how to achieve them. The focus should be on putting together a plan, and then sticking to it.
• The next step would be to fill your financial plan(e) with financial fuel. Never underestimate the importance of saving enough, and from as early an age as possible. Determining the most appropriate strategy and finding the right vehicles to invest in are tools and factors utilised to achieve your goals (and reach your destination).
• Experiencing turbulence – uncertainty and fear, often due to circumstances beyond your control – on your financial planning journey is inevitable. Generally, the best strategy is to fasten your financial seatbelt, sticking to your strategy and not changing course, trying to enjoy the ride.

An experienced financial adviser should be your pilot for the financial flight ahead. No one can predict the future – if anyone claims they can, this should raise red flags for any client or potential client. Perhaps the single most important role of this personal pilot (aside from preparing a plan and building a portfolio suited to their client’s needs) is to build a relationship based on trust, and to assist their client in remaining calm and sticking to a portfolio that has been structured to withstand uncertainty and volatility over time. Changes to the portfolio should be made only if and when necessary – but stay on course, keeping an eye on the destination.

It’s not the plane, it’s the pilot.