Financial Planner Study Groups;  How a group of advisors help each other grow.

Let's start this month’s submission with a riddle: There are two hair dressers in a small town. Everyone in the town goes to either one of them as there are no other salons in the vicinity. You are visiting the town and you need to go to the hairdresser. The one on the left side of the street has a big bald patch in the middle of his head. The one on the right’s hair is lovely and shiny with no hair out of place. Which should you chose?


Answer: As there are only two salons in the town, the hairdresser on the right side will have to go to the hairdresser on the left. So that means that the hairdresser with the big bald patch is actually good at his work so you should choose him.

I heard this riddle when I was younger and besides making me think logically to get the correct answer it also answered a question I never thought to ask….Do hairdressers cut their own hair? Or, do dentists clean their own teeth? Do doctors do their own surgery?? I would hope not…if they want it to done without incident.

What about Financial Planners? The task of making sound financial decisions is less about fine motor skills and more about being disciplined, patient and sticking to a sound plan. So, if a person has the knowledge to understand how finances and the planning process works, can he/she create their own financial plan and keep themselves on track to accomplish their financial goals? Well, it is possible, but it is not really good idea to take on the task on your own.

Similar to the Lincoln's adage 'A man who represents himself has a fool for a client', a financial planner needs to be willing to accept that it can be hard at times to understand your own abilities and limitations. Even financial planners can use an outside source for knowledge, a reality check or a word of encouragement from time to time.

This applies less to the numerical side of financial planning than to the behavior components. Picking a proper investment or insurance policy is easy. For the most part it's simple math. Just like establishing a budget or determining how much of a mortgage you can afford, these aspects of financial planning represent the science side of the profession and require straightforward calculations to come up with an answer. With enough time anyone can find answers to the math component of the profession.

The behavior component of financial planning is a different animal completely. No matter how good you think you are, it is hard to avoid the fact that we are all irrational humans, consistently acting against our best interest or refusing to recognize our own flaws. Financial planners are not immune to this problem. It is very easy for planners to get too emotional, dream too big (either with their business or their personal finances) or to have trouble accepting that life is always changing and goals need to change accordingly. It can sometimes be hard to accept that we are not infallible or immortal, and I am as guilty of this as anyone.

So while I can easily create a budget and a savings plan for my family's goals, who do I use to check my emotional math? I actually use several people. I have my own gaggle of personal financial planners.

During my travels through this career I have developed friendships with many financial planners who have grown their practice along a similar path as my own. Despite a friendly competition to gain business, financial planners are a very helpful lot who enjoy working with each other to grow their businesses and advise their clients through the sharing of knowledge and experiences. A common practice in the industry is for a group of planners (at a similar stage in their career and servicing a similar clientele) to create 'study groups'. Study groups consist of a small group of 6-10 planners who meet a few times a year (either in person or virtually) to fine tune their skills, their practices and their personal financial picture.

My current group, made up of 4 men and three women, have practices all over the I80/I5 corridor of California. We met over the past few years during our mutual transitions to the RIA platform. We share planning ideas, business practice ideas, compliance news and other relevant topics. The benefit to having a study group is you instantly expand your value add for your clients. Also, as discussed, you have a second, third and sixth set of eyes to review your own goals and hold you accountable for your tasks at hand. They are a planner's planner.

It is unknown how long this group will be together. The structure is very informal, and study groups are known for evolving, reforming or breaking up as practices change over time. Yet, for the time being, I have a resource to use when I have questions about a case, about how to grow my practice or how to act less like a human when making my own financial decisions. My need for financial counsel is no different than anyone else. My acceptance of this makes me a better advisor for my clients.

Blue Sky Financial Group
3478 Buskirk Ave. Suite 1000
Pleasant Hill, CA 94523
925.719.9297
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