Five Bad Attitudes of Financial Planners

Five Bad Attitudes of Financial Planners

I love financial planning, but I don’t love financial planners. There are a lot of “industry professionals” with cocky attitudes and big egos (barf). If you are currently working with a financial planner that displays one of the attitudes mentioned below, I strongly encourage you to start looking for a new one. Preferably, someone who is a CFP® and does comprehensive financial planning and not just investment advising.

(If you want some guidance, I recommend reading this Forbes article in which Laura Shin interviewed me regarding 10 Questions to Ask When Choosing a Financial Advisor). I am fortunate to have many friends in this industry who do not think or act like this, but I think it’s important that you’re aware that these attitudes still exist and that you don’t have to put up with this crap. Here are Five Bad Attitudes of Financial Planners

“I’m the “expert” so you should just “trust” me.”

Let’s face it: there has been a lot of bad press for those of us in the financial industry. Just the other day I read an article on a Singing Financial Adviser who defrauded more than $5 million from his clients. (I’m also really annoyed that one singing financial professional gave us other singing financial planners a bad name!) Financial planners are already close to the bottom in terms of “trusted professionals” we don’t need to anymore people adding to the stereotype.

I can’t even tell you how many planners think that because you chose him as your financial planner, that you should just blindly trust him. I believe that trust should be earned. I take the position, “you are the expert in your own life.” That means if you need $50,000 in cash to sleep at night, then that’s what you need. I might ask you about it, but the last thing I want is my clients up at night worrying about their money because of a recommendation that I made.
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“I use fancy-schmancy words to show that I’m smarter than my clients.”

This type of advisor tries to talk over his clients by using financial planning speak then gets upset when a client questions his recommendations. By that I mean that he is annoyed when his clients ask questions. This is the dumbest thing I’ve ever heard.

If your financial planner can’t explain his recommendations so that an 8th grader can understand, then he probably shouldn’t be making those recommendations. I want my clients to feel comfortable asking questions, because it shows me that they are engaged in their finances. To me, I see client questions as a good thing.

Another thing: I have really smart clients. They have graduate degrees, law degrees, Ph.Ds, and are entrepreneurs running successful businesses. I don’t think that I am smarter than them, because I’m not! I think that I can help them form a financial plan to put their money worries at bay and help organize their financial lives.

I see the different ways they could maximize their financial situation to save money, protect their assets, and grow their net worth. I know from personal experience that when someone talks down to me and treats me like a child, I immediately lose all respect for him and stop listening to anything he’s saying. Therefore, I would never talk to my clients this way because I would never want to make anyone feel like that! It’s awful!

“What I do with your investments is a ‘secret sauce’ that only I know.”

This mentality stems from when people used to have brokers to make trades, but I think it’s still prevalent among investment advisors today. People who hold themselves out as stock-pickers and are solely focused on their investment returns will eventually get burned. It’s called an “asset allocation” and it’s not a secret.

An asset allocation is a mix of stocks, bonds, and alternative investments that make up a portfolio and aims to balance risk and reward. I tell my clients that investing is a simply one piece of the pie, but it’s not the whole pie. Investing only makes up about 20% of comprehensive financial planning, so if you’re working with an “investment advisor” that’s only talking about your portfolio without addressing your other financial planning needs (insurance planning, tax planning, estate planning, etc.) then consider switching advisors.

“My financial values are your financial values.”

I think a lot of financial planners don’t spend enough time getting to know the values of their clients and instead project their own values onto their clients. I have seen planners make assumptions about their clients regarding taxes, charitable giving, helping their children financially, and even retirement. Your financial plan should be a roadmap for helping you reach your goals and dreams, and not a reflection of your financial planner’s goals and values.

“It’s not my job to educate my clients.”

No one cares about your money more than you. That is why I think it’s so important that my clients take ownership when it comes to working on their financial plan. I give my clients the recommendations, but we have to work as a team to implement them. I think that a big part of my job is educating my clients.

I talk to them about why it’s important to have one type of insurance over another, how tax planning can save them thousands of dollars, and the importance of having an estate plan. But not all financial planners operate in such a manner. Actually, my friend, Leah Manderson, went in for a job interview recently and the owner of the firm told her that “they weren’t in the business of educating people on how to manage their own money.

They were exclusively in the business of managing client money. In fact, it was to their benefit if the client DIDN’T understand how their money worked.” I was appalled after hearing this, but it’s not uncommon.

I think that the best financial planners: educate, empower and encourage their clients. These planners work with their clients to understand their clients’ values, make recommendations in line with those values, explain the benefits of the recommendations, and then help their clients implement the recommendations. It’s your money. You deserve to work with a financial planner who understands you. Read More


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