Who is leading your team?
With football season well underway and the baseball playoffs in full swing, head coaches are getting a lot of attention. Some are getting fired, some are winning championships and others are building. What each one has in common, however, is that they generally report to team ownership and they guide the day to day activities of the team to best meet the owner’s objectives.
In your world of personal finance, you are clearly the owner of the “team”. The team in your case consists of the subject matter experts that you have hired for service. Typical team members include an attorney, a CPA, an insurance agent or two, an investment person or two, a benefits person and so on. Most people have some semblance of a team around them, even if there is no collaboration amongst them.. Each of these professionals would be appropriately described as assistant coaches asked to fill a specific role in your financial world. Sometimes your coaches get along and perform well, and other times they don’t even know who the others are. It is your responsibility to chart direction and clearly state your objectives. These objectives could be to work forever, endow your children or spend cold winters in a tropical climate.
To make matters worse, sometimes you receive conflicting advice from two or more of your subject matter expert team member advisors, leaving you confused about the actions you may need to take. This confusion then creates decision making that leaves one or more of your team members confused. Even worse, you reach a decision to do nothing because you are so confused about the conflicting advice. Neither situation is good.
What would be ideal is for you is to thoroughly understand all of your options. Each assistant coach’s advice probably has some validity given their knowledge of your situation and resources, but the conflicting advice needs to be reconciled with an action plan that best suits your situation.
If your money is your life’s work, then being your own head coach may be the ideal role for you to play. But this role requires a substantial level of knowledge about all matters of personal finance. That includes insurance and risk, investments, income taxes, retirement plans and planning, estate planning, education funding, business succession and so on. You will have assistant coaches – hopefully very competent subject matter experts in their respective fields. But fractured advice may lead to something significant falling through the cracks.
Perhaps a harder part is identifying someone capable and caring enough to serve in this material role. Advisors come in all shapes and sizes. Some do a great job of selling the concept and a lousy job of delivering the holistic service required to serve in this capacity. Ask questions about the process. Find out how long it takes, and how much it costs. And if that head coach will plan for free, ask for full disclosure on any other sources of income before you take any action.
This article was written by John P. Napolitano