Having more than one financial advisor or financial planner can offer several benefits, depending on your financial situation and goals.
Here are some potential advantages:
Diversification of Expertise:
Different advisors can come from a variety of backgrounds and have varying areas of expertise. Some advisors specialize in certain areas such as: retirement planning, real estate or insurance. By working with multiple advisors, you can tap into a broader range of financial knowledge and skills. This diversification can be especially valuable if you have complex financial needs, such as: estate planning, tax optimization, own a business or professional practice, expect a large inheritance, unsure about best way to fund your retirement, own concentrated positions and need diversification, or have many investments in several different accounts or asset classes and need to consolidate and/or monitor them very closely.
Risk Mitigation:
Having multiple advisors can help reduce the risk of making significant financial decisions based on a single perspective or bias. Each advisor can provide a second opinion or alternative strategies, which can help you make more informed decisions.
Conflict of Interest Mitigation:
Multiple advisors can help reduce the risk of conflicts of interest. If one advisor benefits from recommending specific products or services, another advisor may offer impartial advice. This can be particularly important when dealing with investment recommendations and financial products. Any advisor you work with should always be willing and able to disclose their method(s) of compensation and any potential conflicts of interest that their compensation method(s) might create.
Accountability:
Multiple advisors can provide a system of checks and balances. They can keep each other accountable for the recommendations they provide and help ensure that your financial plan is well-rounded and comprehensive. An advisor that is unwilling to work alongside other advisors, may be a “Red-Flag” and the reason(s) should be discussed.
Customization:
With multiple advisors, you can create a financial team that aligns with your specific needs and preferences. This can lead to a more personalized and effective financial plan.
Fresh Perspectives:
Different advisors may have unique approaches and insights. They can introduce new ideas and strategies that you might not have considered otherwise.
However, there are also potential drawbacks to consider:
Complexity:
Managing relationships with multiple advisors might be more time-consuming and complex. You'll need to coordinate their efforts and ensure they're all working toward your overall financial goals.
Cost:
Hiring multiple advisors may be more expensive, as you could pay multiple sets of fees or commissions. In most cases, this type of drawback can be minimized but you should always be mindful of the cost implications with whom you choose to select to help you with your finances.
Potential Conflicts:
While multiple advisors can mitigate conflicts of interest, there's still the possibility of conflicting advice or strategies. It's crucial to establish clear communication and coordination between your advisors. Your team should embrace your desire to work with more than one advisor if that is what you believe is best for you and your situation.
Consistency:
Different advisors may have different approaches, which could lead to inconsistency in your financial plan. It's essential to ensure that your advisors are working together harmoniously.
In Conclusion:
Having more than one financial advisor or planner can be beneficial if it aligns with your financial needs and preferences. However, it's crucial to carefully select and manage your advisors, establish clear communication channels between them, and weigh the potential advantages against potential for added complexity and cost. Consulting with a trusted financial advisor to discuss your specific situation and goals is a good first step in determining whether multiple advisors are appropriate for you.
How can my firm help you take the first step toward a better financial future?
Whether you are:
>Considering adding an additional or complementary advisor
>In-the-Market to hire a new advisor
>Thinking you might benefit from a Second Opinion on your current planning (even if you are managing your own finances)
Give me a call or send me a text to (704) 589-0941 to schedule a 15 minute “Get Acquainted Call” so I can learn a little about your situation, goals and needs. At the end of that call; we should have a good idea if we can assist you in the areas you desire, if we would seem to have the foundation for a solid working relationship and discuss next steps - with a timetable for moving forward.
