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Should You Have More Than One Financial Planner?

As an investor, you diversify your portfolio. Does the same methodology apply to your financial planning professionals? In theory, it may seem like a good idea - seems like more opportunities to invest, right? - it can end up being more trouble for you and interfere with your financial health. Here’s why.

The downside of having two or more financial planners

Ever heard the saying, “Too many cooks spoil the stew?” That’s likely to happen when you work with two or more financial planners. The reason why is no one’s really “in charge” and there’s usually no communication between these professionals. At best, you’re the go-between in the two parties, but that brings on an amount of stress that you likely didn’t ask for. And if you start to receive conflicting advice from one or the other, it could leave you confused and unable to decide what you want to do.

Investment allocation style

Financial planners may interact with their clients differently, but that doesn’t mean that the investments they’re making on the clients’ behalf are different. You could end up with the same investments multiple times. In fact, since there’s little communication, you could end up with too much risk or not enough, based on similar investments in one sector or style.

Taxes could be an issue

Multiple financial planners could lead to major problems, especially regarding taxes. Without knowing what the others are doing, you could end up paying more in taxes than you anticipated.

Loss of money

If you have multiple accounts, there may be withdrawals occurring that your financial planners are not aware of. You could end up with too much money, which would affect your taxable income. Or at worst, you could run out of money.

If you choose to have two or more financial planners

While we don’t advise it, we understand that it still happens. Sometimes clients choose to go with a legacy advisor who’s been a trusted source for their family for a few investments. Or if your financial planner doesn’t have the same access to estate or insurance planning, then it might be necessary to have more than one financial planner. 

However, you become the point person in these scenarios - and it’s in your best interest to make sure that the separate parties can and will communicate to avoid the problems above.

Want to consolidate your investment strategies? Talk to us.

If you’re ready to have one cohesive investment strategy while also taking care of your retirement, insurance, and estate planning needs, contact a Chatterton & Associates financial advisor today. 

Sincerely,

The Team at Chatterton & Associates

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.


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