Maybe it’s the business model in which I operate—advisor-to-advisor—but I have difficulty understanding why collaboration is so difficult for so many advisors. To me, collaborating is second nature, but for too many financial professionals, the prospect of collaborating with other financial advisors seems threatening, not to mention complex and mysterious.
As we go higher and higher up the expertise ladder, it can get harder to acknowledge new ideas for clients that we haven’t heard of or experienced firsthand. So, the knee-jerk reaction is to reject those ideas. Ego, fear and a host of other impediments can get in the way. “Not Invented Here” syndrome haunts our profession and ultimately hurts our clients.
It doesn’t have to be that way.
Real World Example
A few weeks ago, a financial advisor asked me to join him on a Zoom call with a client since it was a challenging case. The client and his wife had recently retired and needed life insurance. After talking, we determined that the best approach would be to consider a financed transaction. This isn’t a process I implement often enough to consider myself an expert. So, we brought in a premium financing expert to assist.
I know the macho thing is to say: “Fake it till you make it,” but I’m not comfortable with that approach when it comes to people’s health and wealth. You need to enlist the help of outside experts to ensure the best possible outcome for clients.
The couple had a very interesting set of financial circumstances. Each was an individual beneficiary of trust income—funds that would cease on their death. This meant that if one spouse predeceased the other, the surviving spouse would stop receiving a large amount of trust income—income they depended on to support their lifestyle. However, by purchasing the right kind of life insurance for each of the individuals, a potential cash flow shortfall could be avoided. But we had to get the couple the right insurance without compromising their current income. Thus, we decided to consider a financing transaction, albeit a conservative one.
To answer all of the couple’s extensive questions about the proposed financing arrangement, we needed an open give-and-take involving everyone on the call—the couple, their financial advisor, the premium financing expert and myself. The couple was especially engaged in the process. On reflection, having three financial professionals with different levels of knowledge answering the couple’s many questions reassured the couple that all options were being considered, and that they were being well taken care of.
At the end of the hour-long Zoom call, the couple still had more questions and requests, which were all fulfilled by a later email. But the couple felt confident about the process and about the solution we recommended. The collaborative team approach clearly helped the client move closer to their desired outcome. Neither the financial advisor nor the insurance pro nor I tried to dominate the conversation. No one stepped on anyone else’s toes. We just let the conversation flow and allowed our respective expertise to shine through when appropriate. Ultimately, it was a win-win for the client.
Why is this concept so hard for so many advisors?
The client agreed that the recommended solution suited them well and would circumvent a potential cashflow shortfall if one spouse pre-deceased the other. They submitted their insurance application and have taken their physicals to move the process forward. We will, of course, collaborate with legal counsel to draft the proper trust vehicle for the policy.
The key advisor on the case now has a new capability for his practice. Even better, the couple wants both of their sons to consider getting similar life insurance policies that we recommended. The client is very satisfied knowing they have a cohesive team working on their behalf—and their family’s.
Randy A. Fox, CFP, AEP the founder of Two Hawks Consulting, LLC. He is a nationally known wealth strategist, philanthropic estate planner, educator and speaker. He is currently the editor in chief of Planned Giving Design Center, a national newsletter and website for philanthropic advisors.