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Why Your Financial Advisor Has a Financial Advisor

Sept. 24, 2018
Advisors, Investing
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Anjali Jariwala has a financial advisor. So do Mary Beth Storjohann and Trace Tisler.

Google their names and you’ll see why that’s notable: All three are financial advisors themselves.

Why would an expert hire their own expert?

“I can work with blinders on when it comes to my own family’s finances because I am so close to them,” says Tisler, a certified financial planner and founder of Epic Financial in Hudson, Ohio. “It’s vital to get a fresh perspective and work with someone who sees our finances objectively.”

That kind of outside perspective could benefit you, too. Here’s how.

An advisor forces your finances onto the front burner

As a small-business owner, Tisler often struggles to put himself first — and that includes his finances.

“I want to practice what I preach to my clients, so it’s important to run our family finances through the same level of critique and supervision,” he says.

A financial advisor won’t check everything off your to-do list for you — that isn’t the point — but he or she will make it easier for your finances to run in the background so that to-do list is shorter.

A good advisor will also nudge you along to ensure loose ends get tied up, says Storjohann, a CFP and the founder of Workable Wealth in San Diego. That might mean making sure you’ve completed estate planning documents, or secured the necessary insurance coverages. (Learn more about what financial advisors do.)

“I tend to put myself last,” says Storjohann. “If I don’t have someone else holding me accountable to get things done for myself, I don’t get things done.”

Emotions can cloud your decisions

Sure, there are black-and-white answers to some money questions: Yes, you should save for retirement. No, you should not accumulate credit card debt if you can help it.

But outside of those broad strokes, money isn’t black and white — and it isn’t always rational. Your views on money are colored by your background and experiences.

“There’s an emotional component to money and finances, so even though I can give really great advice to my clients, I’m not emotionally attached to their money the way I’m emotionally attached to mine,” says Jariwala, a CFP and founder of FIT Advisors in Redondo Beach, California. (Tisler is Jariwala’s financial advisor.)

Storjohann agrees. “Having spent 15 years in the industry and seeing the clear biases [in clients], I see my own financial issues and behavioral biases as well,” she says.

Behavioral economists say we tend to seek information that confirms our biases. On your own, you may be tempted to choose an investment allocation that leans too conservative or too aggressive, or to sell those investments when the market gets rocky.

If you can’t afford a financial advisor, a robo-advisor — a computer-based investment management service — can ensure you’re in the right portfolio and curb some of these emotions. Many also offer limited access to human advisors.

A third voice can balance a relationship

Anyone who manages finances with a partner isn’t surprised that money frequently gets blamed for divorce. Merging two people’s financial biases and emotions into a single plan isn’t easy.

Jariwala says that’s another reason she and her husband engaged an advisor. “I come from a place where I am constantly worried about money. It represents security,” she says. “My husband is the opposite in that he doesn’t really worry. Because there is this stark difference in opinions — which is very common; I see it in a lot of couples I work with — it’s very helpful to have this third person come in who is unbiased to assess the situation and alleviate concerns.”

A financial advisor you both trust can act as a sort of mediator, helping you make informed decisions together.

“If you’re a physician, you can try to self-diagnose, but sometimes you just need to go and see another physician. That doesn’t undermine your role in what you do — there’s value there that shouldn’t be underplayed,” says Jariwala.

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