The cobbler’s children have no shoes.

The Spanish proverb means that one with a specific skill is so busy assisting others, they cannot take care of their own affairs. Sound like any financial services advisors you know?

Too many advisors are the quintessential do-it-yourself planners for their personal and their practice’s financial and insurance matters. Perhaps they dislike asking for advice or don’t want to pay for consulting with another advisor. Problem is, advisors are biased about handling their own money, and they’re not always the expert. But admitting that somebody else can be better will open the advisor to a fresh, unbiased perspective free from emotional decision-making among other benefits.

Scott Alfred Grant, CLU, QAFP, offered to do a favor for another advisor and look over his finances to see if he could find anything that would help him make or save more money. If everything looked in order, he’d pat him on the back and tell him he’s a genius. It turned out the advisor friend’s investments were fine, but his disability insurance was wrong. It was a policy tailored for blue-collar workers rather than for professionals like a financial advisor. Grant recommended a new policy that would offer more coverage for less cost.

“It was a good example of why you should get people to look at your stuff,” said the 24-year MDRT member from Vancouver, British Columbia, Canada. “He was doing a lot of other things that were excellent financially, but with that little piece there, if he had a claim, he’d be way happier with the new policy than the old one.”

Grant also lets someone else look over his finances. However, he didn’t seek personal financial advice after he married his wife, Louise, who was his client.

“Before we got married, apparently I was a pretty good advisor, but after we married, it seemed to change the advisor-client dynamic between us,” Grant said. 

Initially he didn’t want to bring in another advisor. What if that person questioned his judgment, his acumen? But Louise was asking him “800 questions” about their plan.

“Then I thought maybe getting another advisor in would be good, because if there’s something I haven’t thought of, it’s obviously going to be for our benefit to follow some good advice. I mean, that’s what I tell my clients, isn’t it?” Grant said. “She was feeling that I’m a little biased about my own advice, which is true.”

He asked a colleague from his firm, former MDRT member Ian R. Whiting, to look over their plan and other than mentioning several small matters they should consider, Whiting basically recommended what Grant had told Louise.

“I realized after that first meeting that was the best thing I ever did, and we’ve had many other meetings with him,” Grant said.

When Louise received a buyout offer from her employer five years ago, she wasn’t sure she should take it. Grant, being the numbers guy, opined that she should accept and retire.

“But she is not a numbers person,” Grant said. “Then I realized we had to get Ian back here for a meeting. He has a way of making the most sophisticated idea sound like peanut butter and jam. He went through the numbers and why it made sense to take it and explained it in a different way than I would have explained it.”

Being there

Emotions impact financial decisions more than logic and reason, and James Anthony Savage, EPC, knew he was biased about decisions involving his money. Having another set of eyes looking over his finances is one reason he retained an advisor.

“Doctors have doctors, dentists have dentists and hairstylists have hairstylists who they work with. Why wouldn’t we as professionals do that?” asked the 14-year MDRT member from Calgary, Alberta, Canada.

His second reason was to provide his wife, Linette, a point of contact if he predeceases her.

“If I did it all myself, my wife doesn’t have someone she can trust, work with and handle the final affairs if I die before her,” Savage said. “So, why wouldn’t I have someone she can just call in a heartbeat and then everything gets dealt with?”

Some advisors don’t like sharing their personal information with other advisors, so Savage wanted to find someone he trusted. He assembled a short list of five Top of the Table members, so the couple had no worries about their knowledge and competence. Thanks to social gatherings and meetings they attended together, Linette was already familiar with the candidates, so she didn’t need to formally interview them. Through her previous casual contacts, she was able to assess them in their willingness to help her understand financial concepts without talking down to her. Whereas Savage prefers an advisor/mentor who is blunt and figuratively “hits me on the head” with recommendations, he realized Linette needs an advisor who is softer, so the decision was hers to make.

“It’s about her, because that is the person she has to be able to work with if I’m not there,” Savage said.

Trust but verify

Micheline Varas, RHU, was 10 years into her career when she was leafing through the interest rate returns on financial statements for different clients and noticed three that were less than average. One statement belonged to one of her larger clients, and the other two were her children’s accounts.

“I sat back and thought, this is not an area I really concentrate on, and if I’m not doing well by these people who are very important to me, then what am I doing?” said the 23-year MDRT member from Vancouver, whose practice is 100% based on collaborative work, helping other advisors get hard-to-insure cases underwritten. “So, I should give that to somebody who has expertise and specific investment strategies who may be far better suited to look after these individuals.”

She approached her longtime mentor, Karl John Krokosinski, EPC, a 42-year MDRT member also from Vancouver, to look after all her personal insurance and Robert J. Hack, a 16-year MDRT member from Vancouver, to handle her investments. Krokosinski, a Top of the Table qualifier, and Hack, a Court of the Table qualifier, are advisors she trusts implicitly. One advantage with this arrangement is the symbiotic accountability that exists where she is accountable to them to follow through on their recommendations and she, as their client, holds them accountable for their performance and for handling compliance issues that she otherwise would have to attend to if she self-invested.

“Having somebody else manage my personal finances and insurance portfolio relieves a lot of stress. It requires time and attention, which I don’t have to offer. I’m busy in my own practice with my own clients, so outsourcing my personal financial management allows me to focus on what I’m doing,” Varas said.

Sitting on the other side of the table has given these advisors a better understanding of the client experience.

“It’s a way to learn how to ask better questions, to look through things a little better and understand what my clients are going through,” Savage said. “I’m a very logical thinker and I like to get hard facts, but now I’m asking questions in a little softer way. It’s about understanding the emotions and what’s important to people.”

Savage even mentions to his clients that he consults with advisors for personal and business matters, which results in referrals.

“I ask them why they’re giving me introductions, and they said, ‘It’s because you work with someone. You understand what we’re going through,’” Savage said.

Occasionally, when the Grants meet people socially and financial planning comes up in conversation, other people assume that Scott is handling all their financial and insurance affairs. Then Louise explains that Scott does an excellent job, but he wanted someone else just to verify what they should do and make sure they got good advice.

“I can’t tell you how many referrals I got out of this so far,” Grant said. “I think that’s maybe because they see that I’m humble. I’m not going to push anybody because I’m looking out for the other person’s best interest. I’m not worried about my ego.”

How do you pick?

Savage consults with Varas for his insurance needs and Krokosinski for business matters. Grant leans on Krokosinski for business matters, and Varas and Krokosinski often rely on each other to provide another set of eyes for their corporate clients. They basically relied on already-established relationships to settle on their own advisors. For advisors considering starting out on this path, Varas says you can’t go wrong looking at MDRT members and winnowing the choices by looking among the ranks of Court of the Table and Top of the Table. 

“As far as investments and insurance products, you may stay within your own country, and it’s up to you as to the frequency of contact with that individual,” Varas said. Socialize with MDRT members and ask how they reached their production level, what is their specialty, their process, how they pick products, do they have a team and what are their designations.

“I want somebody who is interested in continued learning and looking at different products or strategies and concepts that have arisen in the marketplace, so perhaps they can educate me as their client,” Varas said. “I also want to know their morals, ethics and values because those have to be very similar to mine.”

Protecting his family means that as his current advisors age out in 10 to 15 years, Savage will need to repeat his search to find replacements that his wife will be comfortable working with. Already, he is confident that should something happen to him, Krokosinski could take over the practice temporarily, take care of his staff and find the right successor to advise his clients.

“Having an advisor to be accountable forces us to get things done, because if I was doing the legwork myself, it’s like I come home and I don’t want to do it,” Savage said. “When you’re working with someone, it’s just one less thing we have to worry about when we come home.”