David Baker shares how lifelong love of board games and game theory gave him the tools to engage clients
As an advisor, David Baker’s day-to-day work requires him to consider problems through the lenses of mathematics, probability, and psychology. It’s a skill perfected through years of experience in work – and decades of experience in play.
“I used to play the really simple classic board games, when I was a kid with my brother, and mom, and dad,” recalls Baker, a wealth advisor at Nicola Wealth’s Vancouver office. “I always thought they were a lot of fun. But it was kind of immediately obvious to me that there was more to it than rolling a die.”
His playing career continued into his teenage years, when he branched off into more competitive tabletop games like Magic the Gathering. With that experience, he realized the strategic importance of understanding not only how he was playing and the objective of the game, but also how his opponents are thinking.
“There’s a massive mathematical component, but there’s also a psychological side,” he says. “You have to be good at understanding who you’re sitting across the table from. How are they thinking, and how can you either help or not help them?”
It’s a well-worn cliché in sports: “winning isn’t everything, it’s the only thing.” But for Baker, it’s also important to make sure everyone’s having fun when it comes to games, where “there’s more on the line than just being the winner.”
Given his love of board games, it was almost only natural for Baker to fall in love with game theory later on. Because it incorporates aspects of risk, strategy, and psychology, he sees it as a framework that can be used in every facet of life.
“Realistically, every decision you make has a luck component,” Baker says. “For you to look at a probability decision tree and try to come up with a business strategy, you have to look at not just the mathematical side, but also the psychological aspect. Who are your teammates? Who’s your competition? Those things should drive your thinking, and I think everyone naturally does that, but they don’t actively do it.”
Most real-world applications of game theory involve thinking about opponents and adversaries – in salary negotiations, for example, or when striking business deals. But in his work as an advisor, Baker focuses on trying to understand his clients, and crafts his communication style accordingly.
“Is this person an engineer? Are they going to immediately understand the mathematical components? Or do I need to dial that back and tell a story instead?” he says.
“Sometimes you can't help but talk about the mathematics of a decision, especially when it comes to investments. But I can take a really tough concept and break it down in really easy-to-understand terms. … It really draws clients into the conversation instead of me lecturing like a professor.”
While Baker prefers to get as much data as possible prior to a meeting, the reality is that most onboarding sessions begin with the advisor having very little information on the client. That means much of the work in the first meeting involves engaging them in conversation, feeling them out, and making them feel comfortable enough to share their goals and priorities.
For many advisors, the go-to board game recommendation would likely be one that teaches financial literacy, like Monopoly or Cash Flow Quadrant. But for his board game of choice, Baker sings the praises of a modern classic called Settlers of Catan.
“You’ve got really easy-to-play party games, and on the other end you have games with way too many rules. ‘Settlers’ is in the middle,” he says. “The rules are always the same, and the mechanics are the same. But every time you play, you have to develop a new strategy … it really depends who you’re playing with.”