“Mistakes.” Now that’s a word that not only describes the Madoff mess (sayonara, Bernie!), but also the recent history of our economy and industry. But the question now is, have all the guilty parties learned enough from the past to not repeat their mistakes in the future?

This is a key question because it looks like the economy is improving and that maybe, just maybe, the recession will lift by late 2009 or early 2010.

When money starts flowing again, I’m concerned that people will lapse into the same bad habits that got them into trouble recently. I’m talking about spending too much, borrowing too much and letting our personal financial needs color our professional judgment. But it’s never too late for advisors to learn from their mistakes and commit to not repeating them, even if the revenue spigot opens wide in the near future.

Here are five steps you may want to take, if you haven’t already. First, give yourself a serious talking to. Admit your errors. As human beings, our capacity for self-deception has no limits. But until you admit to yourself that your life was out of synch, you will be stuck in the past and unable to move forward.

Second, analyze your mistakes so you know exactly what went wrong. What factors contributed to your behavior? What compromises did you make and what logic errors or flawed business practices played a part? Once you identify these things, banish them from your business and your life.

Third, envision a different outcome. Why did you take the path you did? Would things have turned out differently if you hadn’t? Which path should you have taken? What will you do in the future?

Fourth, change for the better. Once you understand how and why your life got off track, work on changing the underlying attitudes, thought processes and/or business practices. Resolve never to make those mistakes again, fully understanding that you will make different mistakes because you are human.

Fifth, keep trying new things. Just because you messed up once is no reason to play it safe in the future. Keep thinking big thoughts, experimenting and challenging yourself to excel. To stop innovating is to die.
At the end of the day, making mistakes can be painful, but they are a part of living and growing as a financial advisor and human being. But don’t beat yourself up over them.