Why A Financial Advisor Hired A Financial Advisor

This is a guest post from Anjali Jariwala, CPA, CFP, of Fit Advisors.  She is a sponsor of this site, but this is not a paid post.

I am a financial planner and I constantly worry about my own personal finances, which may be surprising for people to hear.  My occupation alone does not necessarily make me immune from the same internal demons that can prevent anyone from making better financial decisions.

Money and Security

I grew up middle class, raised by immigrant parents who valued saving money and not taking risks.  However, we lived in an affluent suburb outside of Chicago so in comparison to my peers, I always felt like my family never had enough money.  As a result I’ve felt anxiety around money since early childhood, which has shaped my views of money as an adult.  Money means security, and I constantly struggle and wonder if there will ever be enough.

It seems fitting as someone who is preoccupied with money, I would eventually become a financial advisor.  Now let’s add my husband to the picture – he’s a physician and raised by a single mom but did not grow up with the money insecurity that I did.  He’s the complete opposite of me – he doesn’t worry about money, he “knows” we’ll be fine long-term, and only recently learned our net worth.

The Kinder Questions

My experiences have shaped my practice as a financial advisor, as I work with a many couples who have a very similar dynamic, with differences in spending and different views on money.  I work with these couples to help them find a happy medium and provide an outside opinion that bridges the gap in views.  I start by having client(s) go through George Kinder’s (father of life planning) three questions.  If you’re interested, you can go through this exercise here (Ed note: you can google ‘George Kinder 3 Questions’ to learn more about him and the questions also).

I usually recommend couples answer the questions separately then come together to discuss.  After this exercise, the client and I both have a better understanding of their goals and values.  This is helpful because at the end of the day the goal is to align their money with what brings them the most joy.  I’ve been a financial advisor for several years, but my husband and I just went through this exercise together earlier this year.  We learned that we share a lot of the same values — spend time with family and friends, provide the best for our daughter, and travel the world.

Advisor in the House

It is common for one person to take charge of managing the household finances.  In my relationship, I’ve always been that person.  As mentioned earlier, money means security for me so I only felt comfortable if we were saving a lot of money each month.  Thus, I really tried to restrict how much money we could spend on a monthly basis in our household.  This obviously led to some tension between my husband and I and on many occasions drove him crazy.  Even though we’ve been married for 7 years, we never really sat down and had our money conversation – what are our shared values, how much money do we really need to save, it is ok to splurge once in a while, etc.  Because of this tension, about a year ago, we came to the conclusion that we needed someone outside the relationship to look at our finances so we hired a financial advisor.

That’s right…a financial advisor hired a financial advisor.  Even though I am an advisor with many friends and colleagues in the industry, deciding who to use was a bigger challenge than I expected. I came to the decision that it was best to use someone who would be a good fit for my husband.  As someone new to financial planning, it was important my husband clicked with our advisor so he would be more engaged in the process. (Ed note: I have already asked Anjali for the follow-up piece about how a financial advisor picked their own advisor).

Mo’ Money, Mo’ Problems

Financial planning involves a lot of number crunching and projections but the bigger piece of the process is understanding the emotional component of money.  I am not emotionally tied to my client’s money so I can provide an unbiased opinion and advise accordingly.  I am unable to do that for myself because my childhood views on money cloud my judgment when I try to make financial decisions for our own household.

There is also a burden that comes with managing the household finances that I no longer wanted to carry on my own. I also realized it was unfair to my husband for me to dictate how we as a couple should spend (or not spend) money.  All of these insights came after we started working with our advisor.  Once he became part of the money discussions, it eased a lot of the built up stress and tension both of us were carrying for many years.

Since working with him, I’ve learned to let go of (some) of my frugality and my husband has a better understanding of our numbers and where we are financially.  I cannot emphasize enough how much we value having an outside person review our situation.  I still have my moments where I stress out about money, but now instead of arguing about it with my husband, we schedule a meeting with our advisor who runs our numbers and helps facilitate healthy discussions around our finances.  The relationship with our advisor may differ from the relationship him and I have with our respective clients.

How This Advisor Uses An Advisor

Since the trigger for my money anxiety is cash flow, our advisor heavily focuses on cash flow and 12 month projections.  He runs the numbers for us before every meeting, we go through the assumptions in detail and then spend the rest of our time having frank and open discussions.  Topics such as investments, insurance, etc. don’t cause me stress so I still manage those pieces myself. For my husband and I, this process has provided us with financial therapy that we plan to use indefinitely since I expect our financial life to continue to get more complex.

Ed note: I’ve written previously about how several years ago I fired my own financial advisor.  Having Anjali as an advisor on my site has not stopped me from actively trying teach medical students and residents to learn the basics so they don’t have to pay an advisor for things they should be able to do themselves. 

However I’ve never stopped asking for advice, I’ve just stopped paying for exorbitant fees for someone to do a quarterly rebalance a portfolio I can manage on my own it.  The part of financial planning that many advisors charge the most for, basic investment/asset management, is the part that most people can do without paying significant fees. My CPA is a friend and I ask him questions as they come up.  I ask questions on the White Coat Investor Forum and I email friends who have specific expertise in areas I do not.

Maybe if I made 7-figures and worked twice as many hours I would be willing to pay a single person to do everything for me without me having to lift a finger, but even then I would be the client that asks questions everything incessantly, because I want to know.  I think everyone should want to know what’s going on with their money, even if they pay someone else a fee to help manage aspects of it.

Interestingly, the area I run into the biggest issues is similar to Anjali: I have what I call “cash flow paranoia.”  Even though we’re meeting the savings goals, I get a bit obsessive about cash flow, which leads me to become too focused on some expenses.  That paranoia can cause discord.  I’m not at the point where I’m willing to pay an advisor to manage my own paranoia, but I can’t blame Anjali for doing it.