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  • Jonathan Kolmetz

The barriers to seeking out financial advice from a third party

Marie eats lunch every other month with some old college friends. The table small talk usually centers around their jobs, their partners, their kids and the still remarkable fact that they aren’t thirty anymore.


Today, their friend Diane showed up a little late and fell into her chair with a smile and a sigh.


“You look happy,” Marie remarked. “Do tell.”


“It’s not that exciting,” Diane said. “Jack and I just finished up a meeting with our advisor. Finally got our will and power of attorney taken care of. We’d been putting it off forever. Just feels good to be done with it.”


The group congratulates her and soon the server is there, but Marie now feels a familiar weight – of the things she knows she needs to do too. She’d been using her parent’s financial advisor but missed her last appointment – on purpose. He was stern and he never talked much with her, just at her.


“Marie, something wrong with your salad?” her friend Evelyn asked. “You can send it back. No need to suffer.”


Marie rearranged her expression and kept eating. She wasn’t going to solve all her problems today.


Mental hurdles make it hard


Canada’s Smith School of Business recently studied why people decided to hire an advisor and what the psychological stumbling blocks were for those who didn’t.


Researchers talked to 430 people about their feelings toward financial advisors and also about something they called “financial advice seeking self-efficacy” (FASSE), which is a person’s belief that they are capable of working well with a financial professional.


When people had an unfavorable opinion of a financial advisor and a low FASSE, they were least likely to employ a professional (10 percent of the group). When both attitude and FASSE were high, the number who retained an advisor jumped to 44 percent.


What Smith’s researchers found is also what we see at Oaks Wealth Management.


Many of our clients have tried to manage their finances with a partner or they bought a package. Maybe they made an appointment with the financial advisor of someone they knew and it didn’t work out. The experience left a bad taste in their mouth.


Another mental block is a person’s perceived lack of education about finances. If they’re a corporate executive, or a doctor, or a lawyer, they think they should know more. That is not true. If your daily work doesn’t involve the financial realm, why should you be an expert?


Perceived cost is an issue too, but the truth is, today it’s more affordable to get quality financial planning than it ever has been. The process and fees are far more transparent than they even were five years ago. There are a large number of qualified fiduciary professionals out there.


All about fit


We find that if someone had a negative experience with a financial professional, it takes a little time to undo those associations.


It’s all about fit, it’s all about culture. Ask yourself, does this person really understand me and my family? Do they get my goals and where I’m trying to go?


In the past firms were not focused on these things. It made people anxious about the whole process.


There is a vulnerability in opening up your books to a professional as well as perhaps a fear of judgment. That story that we tell ourselves is what stops all of us from doing the things that would actually make our lives better, whether it be health goals or financial ambitions.


A financial advisor is out there who will fit you and your family at whatever stage you’re in, You just have to go look for them.


When we talk to people after they’ve finally taken the first step, we can see the relief on their faces. They really believe that someone is in their corner and they start to make some changes and get some of their long-term goals taken care of, which could be as simple as a life insurance review or making sure they’re taking advantage of all their corporate financial and health insurance options.


We maybe haven’t made them a dollar in the stock market yet, but we’ve improved their overall financial health and the amount of stress in their lives.


The payoff is well worth the initial discomfort, isn’t it?



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