Tables turned: Planners hire help to handle their finances

Tables turned: Planners hire help to handle their finances
There's an old saying that a lawyer who represents himself has a fool for a client.
DEC 15, 2003
Apparently, some financial planners believe that the adage applies to them as well. There are planners out there, some quite prominent, who turn to others to handle their personal financial affairs. "I wasn't doing a very good job of reviewing my own situation," says James Barnash, next year's president-elect of the Financial Planning Association in Denver and Atlanta. "When I realized that I was doing my annual review 18 months after the last one, it was pretty easy to say, 'OK, this isn't working out real well,'" he says. So Mr. Barnash, who gave up his own planning practice when he became a managing director at Philadelphia-based Lincoln Financial Advisors Corp., decided to hire Rob Smith, a Lincoln adviser in the same office. One might think financial planners could easily do for themselves what they do for clients. However, planners such as Mr. Barnash say not only are they too busy to handle their own financial planning adequately, they lack the necessary objectivity to do it well. "It's harder for you to say, 'Gosh, you were dumb on that one,' or 'Boy, you are hanging on to that investment a long time,'" he says. "When you made that choice, it's hard to sit there and say, 'I screwed up.'"

Hiring arrangements

The hiring of planners by planners comes in many forms. Some hire professionals in their own firm; others look outside for help. Sometimes they seek comprehensive services, including investment advice; other times, it's project specific. Some pay the full rate, others get a discount, taking care of the back-office functions themselves, and still others swap services. Harold Evensky suggests that planners have someone within their practice vet what they have done, as is the practice in his firm with regular clients. But the idea of planners' hiring an outsider to handle their finances makes no sense, he says. "If I were that person's client, I'd be concerned," says Mr. Evensky, chairman of Evensky Brown & Katz in Coral Gables, Fla., which has $450 million under management. "If someone asks me what do I do with my money, my answer is: 'The same thing I do with everyone else's money,' not, 'Oh, I hired someone else to do mine.'" He adds: "If I thought someone could do a better job than I could, I probably shouldn't be in the business." That doesn't make sense to Marcee Yager, a certified financial planner in Los Gatos, Calif. "If I were a client, I wouldn't trust somebody who never had to go through the process themselves," says Ms. Yager, who likens it to therapists going through therapy as part of their training. Otherwise, "they have no idea what it feels like to have to get undressed emotionally in front of somebody else about all of your money issues," she says. Hiring somebody within the same firm is not an optimal situation, says Ms. Yager, president of Financial Vision LLC, a registered investment advisory firm. It's been her experience that those relationships can be treated "too lightly." And if a planner chooses to get outside advice, it's none of their clients' business anyway. "I have never, ever had a client ask me what I do with my money," says Ms. Yager, "but if I did, I could say, 'I have a strategy with my money that's right for me. It wouldn't fit you.'"

Getting sensitized

Ms. Yager, who serves as the adviser for two planners, believes that the professional's spouse should be the one to choose the adviser. In her case, her husband chose Rick Kahler, president of Kahler Financial Group in Rapid City, S.D. Concern for the spouse is another reason planners cite for turning elsewhere for advice. "What opportunity does my wife have to really express her feelings and ask her questions if I'm both her husband and her planner?" asks Mr. Barnash. Having worked with many divorcees and widows, Robert Reed, a CFP and solo practitioner with Reed Financial Planning LLC in Columbus, Ohio, worried about what would happen to his wife if he were to die. Mr. Reed and his wife chose Jill Gianola, another Columbus CFP, who is part of the Alliance of Cambridge Advisors Inc. in Highland, Mich., the same not-for-profit network of fee-only planners to which he belongs. "From a professional standpoint, it really sharpens me to experience what my clients experience," says Troy E. Jones, an FPA board member and president of Access Financial Resources Inc. in Oklahoma City, who works with Ms. Yager. "I experience how it feels when I have a fee agreement [and] how it feels to be sitting on the other end of the phone having the questions asked of me." Michael A. Dubis, a CFP and president of Touchstone Financial LLC in Madison, Wis., agrees that working with a money/life coach has helped him with clients. "When you start telling clients you practice what you preach, but then don't have some sort of financial coach, you're really not practicing 100%," says Mr. Dubis, who has $20 million under advisement.

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