Why I Hired a Financial Planner

This post may seem like a routine piece on a Yahoo Finance or CNN Money page, but there is a twist to this. Typically, people who hire a financial planner are not planners themselves. That’s where this is different. I am on the path to become a certified financial planner and you would think that I deal with the nuances of this industry on a day-to-day basis. That is true, but what makes this unique is the value a third party perspective has on your life. There is more on that later in the post.

My inspiration for hiring a planner came from Rick Kahler, a CFP practitioner in South Dakota who wrote an article in the November 2008 edition of the Journal of Financial Planning entitled, “Becoming Consumers of the Profession we Practice”. After I read this, I came to the realization that we planners need to practice what we preach. We cannot tell clients/prospective clients to do as we say and not as we do. Once I had this epiphany, I chose to take action. The following describes the path of how I did so:

I think in today’s day and age, it can be difficult to find a competent and ethical planner. It seems as though all the good ones have minimum asset/ net worth requirements and individuals like me as an investor/consumer get second tier assistance. I feel the issue stems from the model of our business. The way the majority of the industry that targets my demographic is currently setup is advice sold within a product. I wanted to separate the product from the advice and keep the advice as objective as possible. One way for me to do that was to look for a planner who charged by the hour or charged a flat fee to do a comprehensive plan. There are a group of individuals across the country who follow this same philosophy. They have formed a network to assist the wealthy as well as the not-so-wealthy on improving financial situations. I thought I would start there and see where it took me. I found out there were a handful of individuals across town who were in alignment with this group. I reached out with an email introducing myself and what I set out to accomplish. Below is a sample of this email:

Good day Mr./Ms. Planner,

My name is Darin Shebesta. I came across your name recently from the X Network. Here is why I am contacting you:

I am part of the next generation of financial planners in the country. I work with X in Scottsdale. I am an Associate Planner with them and am working on my CFP courses currently. I read an article recently from Rick Kahler in the Journal of Financial Planning about planning for the planner (see attached). This got me thinking: why shouldn't I have a financial planner myself? Since I am just beginning the accumulation stage of my life, it is difficult to gain unbiased advice because the traditional business model is not set up to cater to consumers like myself. The brokerage side and the insurance side are biased because the compensation is built into the product and the advice is ancillary. I was looking for someone who was a CFP that I can sit down with and work on an hourly basis. I would be receiving professional advice and the planner would be getting paid for his/her time. This would also help me in my profession as I would see what it is like from a client's standpoint.

There were 4 planners that came up in the X Network search in Arizona. I am reaching out to each one of them (including you) to figure out who would be the best fit for our situation. I am getting married within two months and thought that now is as good a time as any to gain a third-party perspective. I would like to set up a phone appointment with you to have a conversation and ask a few questions. Let me know some days and times this week that would work with you.

I look forward to learning more about you and your insight. I look to those in our industry as comrades as opposed to competition. Take care and talk with you soon.

Darin

After sending out this email, I followed up with phone calls to each of the recipients. I believe any of them would have been appropriate to work with, but one stood out. Even though there is a generational difference between us, we still felt they were the best fit. The other candidates seemed to naturally fall out of the running. After the initial consultative meeting, my fiancee and I were comfortable with the relationship and chose to move forward with the fact finding and data gathering process.

Here is how I see the concept of a planner hiring a planner as a beneficial relationship. For one, we all have our own perspective on the world. If we have filters on this, our view is only one piece of the pie. To step outside of our mindset and look at it from another angle is valuable to notice blind spots. I do not know everything there is to know about financial planning or any other topic for that matter. What I do realize is everyone has their own particular experiences and value can be added by applying learning from those experiences to other situations such as my financial situation. We may have differing views on investment philosophy or budgeting, but it is good to hear another’s perspective because this gives you options you wouldn’t otherwise have. Why wouldn’t you have other options had you not been exposed to other perspectives? Because you wouldn’t know the other options existed. Our planner has given us a perspective which we can choose to apply or choose not to apply. There is freedom in this situation.

One of the biggest reasons why planners have resisted hiring planners is the idea that they can do it themselves. If you ask an investor/consumer who does not have a relationship with a planner, the number one reason is “they can do it themselves”. If we are not following the advice that we give clients, how can we expect them to listen to us and follow our advice? There also may be a sense of awkwardness or embarrassment with this situation. All I can say is when you open up your financial life to someone you know and trust, this will go away and you will realize that they are here to help you. There is much more potential benefit from working with a planner versus not interacting with one.

If we want to consider financial planning a profession rather than just an industry, we need to move in the direction of hiring certified financial planners to help us with our financial lives (I am speaking to the planners of the world). Let me close with these questions: Would a doctor operate on him/herself? Would an attorney represent him/herself in court? Take an opportunity to think about this and see if it makes sense. If it makes sense, you have the chance to take action and make a difference in your life.

This topic will be discussed at our next Young Financiers meeting on Tuesday, April 7th, 2009.