Welcome back to our series of blogs on Blind Spots! We all have Blind Spots, things that are potentially hazardous that we don’t even see, things that we should know, or have awareness of, but don’t. This series of blogs focuses on common financial Blind Spots that we see when working with our clients. Today, we want to talk about the hazards of Silo Approaches.
Most people employed in the financial services industry work in a specific area of expertise such as tax, investments, annuities, insurance, estate planning, retirement plans, employee benefits, etc. Because they often don’t work with and share information with other advisors, we call this method of delivering service the Silo Approach. Imagine a single Grain Silo all by itself in the middle of farm country. Now, imagine a single advisor working in one area of specialty all by himself in the middle of your hometown.
For most families, there are four main challenges to working with multiple Silo Based advisors.
First, because Silo advisors are compensated based on the work they do in their area, no one is compensated to help with the strategic planning. Why is that a problem? Because strategic planning is where a family sets goals, develops actions to move toward those goals, implements action items, monitors the progress of that plan and receives guidance for when to make changes. The strategic work is the most important part, and in the Silo Approach it often gets overlooked.
Second, no one Silo advisor has the complete big picture of a family’s goals and financial situation. Without this knowledge, it is almost impossible to understand the impact that recommendations made in one area have on another area of your planning. And, decisions made when working with one advisor may be inconsistent with decisions made when working with a different advisor.
Third, advisors are not collaborating with each other. Imagine having to address a medical problem and working with several doctors who are not working together on your behalf or maybe not even communicating with each other. It would be unacceptable. It should be unacceptable in your financial world as well. Advisors should collaborate on your behalf. Silo advisors often don’t.
Fourth, it’s simply not efficient. Working in this manner requires you to wear several hats: strategic planner, implementer and person responsible for hiring, firing and coordinating the work with all of the Silo advisors. This takes a lot of time and effort that you could be spending on other important areas of your life.
The Blind Spot when working with the Silo Approach is that you don’t know what you don’t know. It is quite possible that there are opportunities that are being missed and gaps that should be addressed. When using the Silo Approach, no one has the responsibility to alert you about these.
Imagine having a financial advocate who has the resources, expertise, and capabilities to bring everything and everyone together for your benefit. At Second Half Strategies, we’ve reimagined the entire wealth management process by creating Integrated Wealth Management, our process that helps you balance and connect all of the areas of your personal financial life. Our objective is a more effective plan that takes less time and energy for you to manage.
What process are you using to find and address your Blind Spots?