Should Advisors Hire a Financial Planner?

Bob Veres

We can all agree that financial planning is a valuable service. Consumers of the service get the value of an expert who will focus professional attention on their financial life, help them clarify their goals, keep themselves organized and give them sound advice about how to navigate through life’s complications.

On some level, we can also agree that just about everybody needs to engage the services of an outside professional. Right?

Even you.

Wait; what?

In his most recent column in Financial Planning magazine, financial planner David Grant talked about his experiences when he and his wife hired a financial planner. Yes, you read that right: a financial planner hired a financial planner.

This is rare, but not unheard of. In my travels the past 15 or so years, I’ve talked with half a dozen planners who hired outside advisors – in each case, from another firm – to provide financial planning advice and in some cases to also manage their finances. All of them told me that they were surprised at how much more value they got out of the experience than they’d expected.

At the end of this article, I’m going to invite you to take a survey on this topic. But based on conversations with advisors who have allowed themselves to be financial planning clients, I’ve come to believe that most – perhaps all – financial planners should hire an outside professional.

Here are some of the reasons why.

  1. It demonstrates that you believe in the service you’re providing. You understand the value that a financial planning client receives, right? You, yourself, add value to your clients’ lives, don’t you? So why shouldn’t you want the same thing for your own family? Isn’t it hypocritical for you to sell people on the value of planning services when you aren’t convinced you need them yourself?

    One advisor, justifying his decision to hire an advisor he admired in his community, pointed out that attorneys very rarely represent themselves in court, and doctors routinely go to other physicians whenever they get sick or injured. Other professionals freely acknowledge the value of seeking out the services of their peers. Why should financial planners be the exception?

    By hiring an outside advisor, you demonstrate a commitment to, and belief in, the service that you provide to others.

  2. It ensures that you get proper attention paid to your own financial situation. Everybody knows the story of the cobbler’s children, who wear old worn-out shoes because the cobbler is too busy providing fancy footwear for everyone else in the community. The advisors who hired an outside planner were inevitably surprised to realize that they hadn’t been paying proper attention to their own family goals and objectives, savings rate etc. Their outside advisor put more time, energy, attention and focus into their financial situation than they would have put into it on their own.

    You’re more likely to meet your own financial goals when you hire an outside planner to hold you accountable for them.

  3. Hiring an outside advisor engages the spouse in the planning process in a way that isn’t always possible when you’re doing it yourself. In his column, Grant talked about how his wife got involved in the discussion about family goals and the family’s future, and he appeared to be surprised at some of what she said. I suspect that this is normal; all the assumptions that creep into a relationship become embedded in your self-planning work (to the extent you do it). An outside advisor would make sure the spouse is included in the conversation, and explore assumptions, creating a more inclusive plan.

    Your own family’s financial planning becomes more collaborative – and, therefore, stronger.

  4. Advisors who work with an outside advisor learn first-hand what it feels like to sit on the other side of the desk. This can be incredibly valuable. You experience what it feels like to financially undress in front of a professional who can spot any inconsistencies or areas of neglect – and it makes you instantly more compassionate and gentle toward your own new clients during your initial meetings.

    You engage in the conversation about your future, and realize that this – and not the mechanics of the portfolio – is the part that you enjoy. In your conversations with clients, you start putting more of the focus on the clients’ goals, objectives, conversations about their current situation and other things that you, yourself, have realized are more interesting and important to the person on the other side of the desk. You become more patient as clients talk about themselves and seek to be understood. Doctors call this the bedside manner. The experience helps you refocus your own bedside manner with clients.

    The process of working with an outside advisor helps make you a better—and more attractive-to-work-with—financial planner.