Welcome back to the sixth and final article (until I have a new confession) in the “Confessions of a Financial Planner” series. I’m going to share about how I haven’t hired a financial planner, and why I would eventually like to hire one.
You can read the other articles in the series below:
- Confessions of a Financial Planner: I’ve Held “Too Much” Cash
- Confessions of a Financial Planner: I Felt Guilty About An Inheritance
- Confessions of a Financial Planner: I Took Two Years to Update My Estate Plan After Getting Married
- Confessions of a Financial Planner: I Bought a House for Three Years
- Confessions of a Financial Planner: I Handle Most of the Finances
You may be thinking, “Elliott, you are a financial planner! Why would you hire someone?”
I’ll share more, but it comes down to the idea that it’s good to have a thought and accountability partner. It’s great to have an independent, objective third party to think through ideas and help you to take action.
Attorneys don’t usually represent themselves. Doctors have their own doctor. Many professionals hire other professionals for themselves.
Financial planning can be similar. I know many financial planners have hired other financial planners and loved the decision.
I’m going to talk about why we haven’t hired a financial planner, which professionals we have hired, whether I regret not hiring a financial planner, why it’s important to hire a financial planner, and when you should hire a financial planner.
The Confession of a Financial Planner: I Haven’t Hired a Financial Planner
My confession is that I’ve thought about hiring a financial planner a few times, but I’ve never done it.
I’ve hired many different professionals that surround money and financial planning, but I’ve never hired a financial planner.
I’ve hired a student loan consultant for my wife’s student loans. Here are two people I trust for student loans: Dan Rooker and Emma Crawford. I knew enough to be dangerous, but not enough that I felt confident making a decision based on that knowledge. I learned a lot, it changed how we planned to file taxes, and I ended up becoming friends with our consultant.
I’ve hired an accountant. Could I learn what I need and take the time to do our tax return? Yes, but I have no desire. Our taxes have become more complex as I launched my business, rented out our old home, and it’s no longer only a federal tax return for myself. It’s simply not something I want to deal with anymore.
I’ve hired an attorney to create my initial estate plan and then update it once we got married.
A financial planner would be helpful at some point because while I’m busy being a financial planner for others, I don’t set aside the same amount of time for our finances. My wife and I still do occasional check-ins about finances, discuss savings goals, talk about possible big life changes and how that would affect our cash flow, and actively do tax planning, but it’s not the same as having our own financial planner.
Reasons/Excuses of Why I Haven’t Hired a Financial Planner
I’ve never hired a financial planner for a few reasons. The reasons have changed over the years.
When I was young and single, there wasn’t much planning to be done other than create an emergency fund, save as much as possible to my 401(k), and start saving for a down payment on a house. I also worked at a medium-sized firm with great colleagues who would help answer questions as I had them.
It wasn’t until my wife and I met that there started to become more a reason to hire a financial planner. My excuses for why we haven’t are below.
Have the Knowledge
On the technical side of things, I have the knowledge to be our own financial planner.
When I don’t have the knowledge, I outsource it to other professionals, such as the student loan consultant and our accountant. They are great at filling in the gaps where I don’t feel comfortable advising us.
I do a good job at tax planning for ourselves, which is important given that I’m self-employed, my wife is on an income-driven student loan repayment plan, we plan to move states in the future, and plan to be in a different tax bracket.
We have appropriate life and disability insurance in plan.
We have our estate plans updated, though a bit later than I would have wanted.
Our property and casualty insurance has been reviewed and adjusted a few times as our life has changed.
Our investments are allocated in a way that will help our future selves and we contribute regularly to our retirement accounts.
We aren’t doing a bad job and we’ll get to where we need to go — it’s just not the best job or the most organized.
Others to Bounce Ideas Off Of
Similar to how people may outsource their questions online and receive responses from strangers, I have a community of financial planners that I can bounce ideas off of and hear their thoughts.
I don’t do this frequently, but I did it when we bought our house for three years. I’ve had others give me their gut check about the amount of life insurance we have. There are other small things that also come up, such as how much to contribute to retirement accounts versus brokerage accounts.
It’s not a perfect system because they aren’t acting as my financial planner, but it does give me another perspective.
It’s also not a dedicated time for us. I have to reach out to them.
It works well enough for now.
Little Time for Both of Us to Participate
One of the biggest reasons I haven’t pushed hiring someone is that we are short on time. For many people, it’s a good reason to hire someone!
In our case, I’m willing to accept “good enough” instead of using up that time to meet with a financial planner. Financial planners create space to help you explore what’s important and then figure out the best ways to connect your money to living that ideal life. I’d like that space in the future, but not right now.
As my wife continues her training, we don’t get much time together and already struggle scheduling things. I can’t imagine trying to coordinate our two schedules with a third person.
Our schedules will get easier in the future, and that would be a better time to hire someone.
Wife Knows Financial Planners She Could Contact
If something happened to me, either a disability or death, my wife has a few names of people she could turn to for help.
It wouldn’t be the most ideal setup because she doesn’t know them personally and only has heard of them when I’ve shared about what is happening in their life, but it’s better than nothing.
If I were older, I’d be more concerned that she doesn’t know them, but for now, I’m going to hope that I’m okay for a few decades. If I’m not, she has names of people she could contact and enough life insurance money that she would be okay.
Haven’t Hit that “Stuck” Moment or Transition
In my experience, most people reach out to a financial planner when they get stuck and/or anticipate a big transition.
It can be a big pay raise, changing jobs, having a kid, retiring, inheriting money, getting married, getting divorced, or helping parents with caregiving.
We’ve had a few transitions these past few years — notably moving and transitioning jobs — but I had already planned fairly well for it.
I can see us having another major transition in a few years and it may be helpful to have a financial planner at that point who already knows us and can help us make good decisions around the transition.
Do I Regret Not Hiring a Financial Planner?
No, I don’t regret not hiring a financial planner yet.
We’re in a great place financially. We are reaching our goals, rarely stressed about money, and get to do what we want. It helps that we don’t have very expensive tastes.
There may be a few things we could be doing better, such as more frequent conversations about money and a better system for managing our cash flow on a household level, but we are doing a good job enjoying the present moment while still saving for our future selves.
Why It’s Important to Hire a Financial Planner and When You Should Hire
If you’ve never hired a financial planner or hired one that wasn’t a good fit, let’s talk about why it’s important to hire a financial planner.
First, not everybody needs a financial planner. I’ve written about 7 reasons you shouldn’t hire a financial advisor. If you are doing a great job on your finances, your significant other is involved in the finances, and stay up to date on financial planning, you may not need to hire one.
I’ve been in the industry for over a decade, and I commonly see people hire financial planners for the following reasons:
- A big life change where they don’t feel confident about what to do
- Financial situation got more complex
- They no longer want to do it themselves or don’t have the time
- They’ve made a big mistake about their finances
- They want their spouse to have a relationship with a financial planner if something happens to them
There are other reasons, but these are the ones I see the most. When people come to me, I frequently hear about how making financial decisions as they retire feels far more challenging than when they were saving. They feel they have more choices and aren’t sure how they impact each other.
I’ve had others where they inherit money and “don’t want to screw it up.” They feel the money is a gift and want to look after it prudently.
Others have tried doing it on their own, but recognize they aren’t spending time on it and know they are costing themselves money, but aren’t sure how to fix it.
Finally, many people may have done a great job with their finances, but their spouse never cared to be involved. As they got older, they recognize this is a huge risk, and they want a financial planner to take over now to make the eventual transition easier when they can no longer do it.
Everybody’s decision is slightly different, but I commonly see a sense of relief and peace of mind that they have a financial planner who will help them think through some of the most important decisions in their lives, ask great questions, and help them come to a decision that works within their values and priorities.
Final Thoughts – My Question for You
I haven’t hired a financial planner yet, and that’s okay. I anticipate we will one day. In the meantime, my knowledge and experience is good enough.
When it’s not, I have friends in the industry we can bounce ideas off of or hire professionals for certain planning decisions.
Unlike some of my other confessions, this one doesn’t occupy much of my head space.
If you’ve thought about hiring a financial planner, I encourage you to reach out to a few. Interview them, see how they work, and whether it would be a good fit. If you want to schedule a time with me, you can do it on this free consultation page.
I’ll leave you with one question to act on.
When would you hire a financial planner?
