Trust the Process: How Systems Replace Practice in Financial Planning

A client recently asked me: "How can I trust a process when I won't know if it worked for another 20 years?"

It's a brilliant question. In most areas of life, we build trust through experience. Make bread enough times, and you trust your method. But with retirement planning, we're asked to trust a process we'll only test once, with results that won't arrive for decades.

This is the fundamental challenge we've been exploring: you can't practice retirement, and mistakes are invisible until it's too late. So what's the solution?

The answer isn't particularly exciting, which is precisely why it works.

Why Boring Beats Brilliant

In 1975, Jack Bogle created the first index fund. Critics called it "Bogle's Folly." Why would anyone want average returns? Surely it was better to pick winning stocks, time the market, find the next hot opportunity?

Fifty years later, we know the answer. Study after study shows that simple, boring index funds outperform 90% of actively managed funds over 15+ year periods. The systematic, boring approach beat the clever approach so consistently it's not even debatable anymore.

But here's the catch: for any given year, or even five years, the boring approach often looks wrong. The systematic process requires trust without immediate validation. You have to believe in the process when you can't see proof it's working.

The Process as Proxy for Practice

Since we can't practice retirement, we need something else. That something is process - a systematic approach that aggregates the lessons from millions of people's "one attempt" at retirement.

Think of it like this: You personally can't practice retirement multiple times, but collectively, humanity has practiced it millions of times. A good process distils those millions of experiences into systematic principles.

It's the difference between:

• Individual practice: "I'll try different approaches and see what works for me"

• Collective wisdom: "Here's what's worked for thousands of people in similar situations"

When you can't have the former, you'd better have the latter.

The Pilot's Checklist Principle

In 1935, the US Army Air Corps held a competition for its next-generation bomber. Boeing's Model 299 was the clear favourite - it could fly faster, further, and carry more bombs than any competitor.

During its demonstration flight, the plane crashed, killing two crew members. The investigation revealed no mechanical failure. The crash happened because the new plane was too complex for any pilot to remember all the necessary steps.

The solution? A simple checklist. Today, aviation is the safest form of travel precisely because pilots follow systematic processes rather than relying on memory, intuition, or feeling.

Financial planning needs the same approach. Not because you're incompetent, but because the complexity and time horizons involved exceed human cognitive capabilities. The process is your checklist for decisions you can't practice.

What Makes a Process Trustworthy?

Not all processes are equal. The financial services industry is full of complicated "systems" that are really just dressed-up sales tactics. A trustworthy process has specific characteristics:

1. Evidence-Based Foundations The process should be based on empirical evidence, not theory or hope. Diversification works not because it sounds clever, but because we have centuries of data showing it reduces risk without sacrificing returns.

2. Simplicity Over Complexity Complex strategies create more opportunities for error and make it harder to maintain discipline. The best processes are boringly simple. Spend less than you earn. Invest regularly. Diversify broadly. Rebalance periodically. That's it.

3. Built-in Error Correction Since mistakes are invisible, the process needs regular review points. Periodic reviews & systematic health checks - these aren't optional extras, they're essential components.

4. Flexibility Within Structure Life changes, and rigid processes break. Good systems have structure but allow for adaptation. Like a recipe that works whether you're cooking for 2 or 20.

The Emotional Challenge of Trusting Process

Here's what nobody tells you about following a systematic process: it feels wrong. Regularly.

When markets crash, the process says "stay invested" or even "invest more." Every fibre of your being screams to sell.

When markets soar, the process says "rebalance" (sell some winners). Every instinct says to let it ride.

When your neighbour makes a fortune on cryptocurrency or property or whatever, the process says "stick to your plan." Every emotion says you're missing out.

The process will feel wrong precisely when it's most important to follow it.

Real Examples of Process vs Instinct

March 2020: The Pandemic Test 

When COVID hit, markets crashed. Every instinct said "sell everything." The process said "stay the course" or even "rebalance into equities."

• Clients who trusted the process: Fully recovered within 6 months to a year

• Those who followed instinct: Locked in losses, missed the recovery

The process felt insane in March 2020. By December, it looked genius. But it wasn't genius - it was just systematic adherence to proven principles.

2017-2019: The FOMO Years 

During the tech boom, one client watched his conservative portfolio return 8% annually whilst his colleague boasted of 30% gains in tech stocks. He wanted to abandon the process and chase returns.

We stuck to the process. His colleague's portfolio dropped 40% in 2022. My client's dropped 15% and recovered within a year. The "boring" process protected capital when it mattered most.

The Compound Effect of Consistent Process

Small, systematic actions compound dramatically over time. The process isn't clever. It's just consistent. But consistency beats cleverness in domains where you can't practice and mistakes compound.

Why We Abandon Good Processes

Understanding why people abandon proven processes helps us stick to them:

1. The Feedback Vacuum Without immediate feedback, we question whether the process is working. This doubt peaks precisely when markets are volatile - exactly when process matters most.

2. The Sophistication Trap Simple processes feel too basic. Surely something this important requires complexity? This thinking leads to overcomplication and eventually paralysis.

3. The Exception Delusion "Yes, but my situation is different." Everyone thinks they're the exception. While personal circumstances vary, fundamental principles remain remarkably consistent.

4. The Recency Bias Whatever happened last feels most important. Recent losses make us fearful. Recent gains make us greedy. Process gets abandoned for recent emotion.

The Paradox of Process Trust

Here's the uncomfortable truth: you'll never fully trust the process until it's worked, but by then you don't need it anymore. This paradox is unresolvable.

The solution isn't to achieve complete trust - it's to act despite incomplete trust. Follow the process not because you're certain it will work, but because:

1. It's based on evidence from millions of outcomes

2. The alternative (no process) has consistently worse results

3. A good-enough process followed consistently beats a perfect process abandoned

The Liberation of Systematic Simplicity

Once you accept that you need a process rather than practice, something liberating happens. You stop trying to be clever. You stop timing markets. You stop chasing returns. You stop second-guessing.

Instead, you do the simple, boring, systematic things that compound into wealth over decades:

• Spend less than you earn

• Invest the difference

• Diversify broadly

• Keep costs low

• Stay the course

• Review regularly

• Adjust gradually

• 
  

It's not exciting. It won't impress anyone at dinner parties. But it works.

The Ultimate Test

A client once asked: "How do I know if I'm following the right process?"

Here's my answer: A good process should be so boring that the only exciting thing about it is how well it works over decades. If your financial process feels exciting, you're probably gambling, not planning.

The right process feels like brushing your teeth - mundane, repetitive, seemingly pointless on any given day, but devastating to neglect over time.

Moving Forward With Systematic Trust

You can't practice retirement. Mistakes are invisible for decades. These are immutable realities of financial planning.

But you can follow a process refined by millions of retirements. You can trust in systems proven over centuries of market cycles. You can replace the need for practice with systematic, boring, effective processes.

Will it feel wrong sometimes? Absolutely. Will you question it during market crashes? Certainly. Will you be tempted to abandon it for something more exciting? Regularly.

But if you can maintain the discipline to follow a boring process in a domain where practice is impossible and feedback is delayed by decades, you'll discover something remarkable:

The process works not despite being boring, but because it's boring. In financial planning, boring is the highest compliment you can receive.

After all, you don't want exciting surgery, exciting aviation, or exciting structural engineering. Why would you want exciting retirement planning?

Trust the process. It's the only practice you'll get.

The value of investments/pensions and income from them can fluctuate (this may partially be the result of exchange rate fluctuations) and you may get back less than the amount invested.