Most professionals will agree that their lives often lack the benefit of the very service they provide to others: the attorney without a will; the doctor who hasn’t had a physical in years; the accountant who files his own return at the very last minute (extensions included!). Even the farrier who cares for my horse’s hooves admits that his own horses often go quite some time without a trim.
A recently released report from the Financial Planning Association’s Research & Practice Institute highlights the challenges and future trends for financial advisors and the growth of their businesses. A couple of key statistics reveal that financial advisors are no different from any other professional service provider:
- 50% of financial advisors do not have a written business plan
- 46% of financial advisors do not have a retirement plan for themselves, yet 40% are planning to retire within the next 14 years
- Only 25% of financial advisors have a succession plan in place to ensure their business transitions appropriately when they retire
The adage “the cobbler’s children have no shoes” certainly applies here, just as it does for the other professional examples given above. What is the challenge?
At the end of a work day, the last thing most professionals want to do is continue doing what they have done for others for themselves. It is the result of time pressure and performance fatigue, representing the very real fact that it is often much more difficult to do for ourselves what we do for others.
What’s an advisor to do? Hire your own financial advisor.
Here’s what it could look like:
- Identify an employee in your firm to complete your financial plan.
- Work with your business partner and complete financial plans for each other.
- Select an advisor whose work you admire and have them prepare a financial plan for you.
- Find an advisor you do not know and hire them for planning.
Yes, I know these suggestions make you squirm a little. Yet it puts you in exactly the same role as when prospective clients approach you, and that in itself is a great exercise.
Consider these upsides:
- Working with an employee in your firm allows you to experience how they work with clients. Expect a bit of nervousness from the employee – you are the boss, after all! You can also evaluate the employee for growth opportunities and possibly succession planning.
- Financial planning with your business partner can lead to a better understanding of each other’s motivations and timelines. It may also bring about new ideas for the client experience.
- Acknowledging the skill of another advisor could deepen your relationship and allow for the exchange of ideas between firms. If succession planning is on your mind, this is a way to vet a potential successor.
- Experience for yourself what it is like to identify and hire a financial advisor. You will learn how challenging it can be to differentiate between the various advisors. You will gain real-world experience in marketing and the client experience.
Given the statistics above, the lack of planning by financial advisors is concerning. Let it not be you who is revealed as the emperor who has no clothes!