10 reasons why it’s best to work with a financial professional


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It is important to know the financial planning process, changes in tax laws and the business cycle. That’s why you hire an advisor. (Photo: Shutterstock (

Everyone wants to cut out the middleman and buy straight from the source. It can get very scary for finance professionals. Who no longer uses a travel agency? (FYI: they are alive and well, but have moved upmarket in the luxury segment.)

On the other hand, few people self-heal or defend themselves in court. Instead, they hire doctors or lawyers.

At first glance, investing, doing financial planning, or buying insurance seems cheaper if you do it yourself. Why should someone work with you instead of doing it themselves?

1. Insurance is a complicated product. Everyone has stories of homeowners who only discovered gaps in their coverage after a disaster. Health insurance policies may have enrollment or waiting periods before coverage takes effect. Pre-existing conditions can be another area of ​​confusion.

What people need to know: Different people have different needs. Products may look the same, but they are not. You need professional advice.

2. Ongoing relationship. Insurance shouldn’t be a one-time purchase. Think about health insurance. Different products and suppliers can enter the market. They might be better suited to the customer, or even save them money when it comes time to renew. People need different types of insurance at different times in their lives – auto, home, liability, health and dental insurance are just a few examples.

What People Need to Know: You need someone who can see how all the pieces fit together and who can spot gaps in the coverage.

3. After-sales assistance. Most people agree that it’s important to find the right company in terms of product, coverage, and price. Experienced agents will also say that it’s also important to choose companies that pay quickly when you make a claim, although the general public may assume that everyone pays immediately.

What people need to know: If you need to make a complaint, you want a professional representing your interests to take care of the details. You want someone by your side.

4. The fiduciary concept. Get away from the regulatory discussion. The consumer wants to work with someone who has their best interests at heart, and most financial professionals work that way. Why? If the customer feels they have been overcharged or are not getting good service, they vote with their feet. Good agents and advisers look for a long-term relationship. The customer sends more money, buys a range of products, and provides referrals.

What People Need to Know: It is in the agent’s or advisor’s best interests to provide excellent service. Your needs are met and you feel comfortable doing more business.

5. You have been referred. The agent’s name was not chosen at random. Baby boomers prefer referrals from people they know who are satisfied customers. Gen X and younger people prefer sites like Trip Advisor where they view user-generated content. Someone said they had a positive experience and “you should try it too.

What people need to know: Someone did the research and the legwork to screen you and felt confident enough to recommend you.

6. Financial planning. Life is not a series of unrelated purchases. People should have a framework or roadmap to help them achieve their financial goals. Someone has to provide one. They can buy one separately, implement it themselves, or complete a financial plan with an advisor who also sells products that fit into the plan.

What people need to know: Either way, they need a plan. It often comes from a professional.

7. Skills. We heard “A little knowledge is dangerous”. Overconfidence can be a big mistake. You need to understand the process of financial planning, investing with intelligence, not with emotion. You need to understand the changes in tax laws and the business cycle.

What people need to know: Financial advisers receive training and generally have continuing education requirements.

8. The economic landscape is changing. Our economy goes through cycles. The US economy and others around the world don’t often sync up. Interest rates move in cycles. A person who has invested well on their own may be ideally positioned for the economic cycle we have just left.

What People Need to Know: Investors can benefit by working with someone whose job it is to look at the big picture and follow up on research.

9. Hold hands. You have seen the statistics. The performance of growth mutual funds over time is often greater than the return earned by growth mutual fund investors. It is human nature to buy high and sell low. Cable TV news is causing a stir in the stock market. Often the best strategy is to sit still.

What People Need to Know: Financial advisors can be great at grabbing a client’s attention for the long haul, especially when the short term is hectic.

10. Someone to blame. No one wants to say “I made my own investment decisions and I was wrong. They would rather blame someone else if things go wrong, even if it’s not their fault. This is one of the hardest parts of being a financial advisor.

What people need to know: People often feel better after removing something from their chest. They just need a lightning rod for their frustration, and that is the advisor.

Some people want to cut out the middleman and invest on their own. But there are many reasons intermediaries add value, and potential customers should know it.

Bryce Sanders is President of Perceptive Business Solutions Inc. He provides training on HNW client acquisition for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon.

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