Even if you already work with a financial planner, you may need the services of a financial specialist such as an attorney, accountant or insurance agent at some point. But how can you tell whether that specialist is giving you the right advice for your finances?
If there's a situation where the specialist's advice seems to conflict with the suggestions of your financial planner, as a rule the specialist always has the last word. After all, they are the experts. Their particular knowledge is the reason your general financial planner recommended consulting them in the first place. Occasionally, however, a specialist's recommendations may not be in your best interest. Most are skilled professionals who are very good at their jobs and provide a great service to their clients in moving the financial planning process forward. However, as in any profession, there are exceptions. (For related reading, see: The People Who Should Be on your Retirement-Planning Team.)
When a Specialist's Advice Might Not Be Right
One example of this is when a specialist's knowledge doesn't adequately cover the particular needs of a client's situation. Another example is a specialist who has a conflict of interest from receiving commissions for the sale of financial products. Both of these may be more likely to occur when specialists are chosen less because of their skills and more because of a prior relationship with the client.
While most specialists are open to listening to another point of view, acknowledging errors or learning new information, some are not. It’s those specialists who lack needed knowledge and are unwilling to admit errors who cause financial planners to lose sleep.
When a Specialist and Financial Planner Disagree
If a planner disagrees with the client’s specialist and says so, this can put the client in a difficult and unenviable position of having to choose between two trusted professionals, one of whom may have some incorrect information. Unfortunately, the client usually doesn’t have the training or knowledge to know which one to choose. If the client is forced to side with one professional over the other, at best it damages the ongoing ability of the professionals to work together and at worst it finds the client firing one or both.
Planners who choose to keep silent about the disagreement and defer to the specialist can save face as well as retain working relationships with both the client and the specialist. They can only hope that the apparent poor advice the specialist has given the client works out in the long run.
Most planners I know will weigh the severity of the issue, as well as the strength of the client’s relationships with them and the specialist, when deciding how forcefully to oppose poor advice. If the consequences are significant, many financial planners will risk losing their relationship with the client to point out a specialist's error. (For related reading, see: Tips for Resolving Disputes With Your Financial Advisor.)
How to Ensure You Receive Good Advice
What can you do to encourage your planner to level with you if one of your specialists is giving you advice that doesn’t serve you well? I don't have a definitive answer to this difficult question. One thing I can say is communication is essential. It’s important that you fully and openly explore any disagreement a planner expresses, no matter how insignificant it sounds.
My second suggestion is to minimize the chances of getting poor advice in the first place. Avoid anyone who might have a conflict of interest, especially if they receive commissions for selling you something. Don't assume a professional you've worked with in other areas is qualified for this particular concern. Make sure your planner has thoroughly researched the specialist's expertise and don't be afraid to ask questions about anything you don't fully understand. Partner with your financial planner to choose a specialist carefully in the beginning and you increase the likelihood that all of you will be able to work effectively as a team.
(For more from this author, see: Find a Financial Advisor Who Has These Qualities.)