Egocentric Pitfalls Every Advisor Should Avoid

Dear Advisors,

I got my heart broken recently by an article about the sanctioning of 12 financial advisors by the CFP board. The main reason they were penalized was because they had either failed to pay taxes or declared bankruptcy.

If these advisors had their own financial planners, would they have found themselves in this situation? I don’t think so. What keeps advisors from hiring their own financial planners? Advisors are people too, and life happens. Family emergencies, the stress of running a firm, a busy lifestyle, these all contribute to going without a financial planner of their own. 

In my experience, the main obstacle is our old friend Ego. It’s not fun, but it needs to be discussed. Warning– toes are about to be stepped on as we expose some ego issues in the financial industry. After that, we’ve got some tips on how to avoid them! 

• Keeping Up With the Joneses 

  • Like I mentioned, advisors are people too, and anyone can let their ego push them into a phenomenon I call “lifestyle creep.” Many of the people who hire financial advisors have a certain amount of wealth, and their advisors are tempted to imitate their habits by, say, sending children to a private school or buying new cars. When overspending and damaged credit take effect, ego can then prevent us from asking for help. 

  • I remember a meeting I had with a client some years ago. They’d made a load of money, but it came with a large bill from the IRS. We had to update their plan to make the funds available while staying in a good place overall. While working with them, I recall making a casual joke about how most people wish they had this problem. On one hand, I was pointing out the client’s good fortune, but now I see the problem. I was feeling a little resentment that I didn’t have the money to allow myself a cup of tea with my friends after going for a weekend run. I am fortunate in my own ways, but I too am guilty of listening to Ego’s bestie, Envy. 

• Strength In Vulnerability 

  • There is a common mindset that asking for help means you’re acting weak. Researchers report a higher level of confidence in men and this can increase the likelihood of this egocentric mindset among men as well. In my experience, male advisors are less likely to hire an advisor of their own. I see this in my own practice. Being female, it follows that other women are likely to want to work with me. However, half of our advisor clients are female and the other half are male, which does not reflect the gender ratio of advisors in the industry. Being a 3rd generation advisor, two of the most important male figures in my life are my father and grandfather, who were both advisors. Working along side them during my time at our family’s firm helped develop my passion to help ALL advisors reach their dreams and goals!

  • The truth is that asking for help demonstrates character and maturity. Vulnerability is STRENGTH. If you’ve been having trouble reaching out, you can feel safe here. We value your experiences and insights. This is also a great opportunity for spouses to join forces and make educated, confident decisions about their finances and future. Your financial advisor should be on the list of people you call in the days after an emergency. 

• How to Avoid the Pitfalls of Egotism

  • Keep your ego in check by being more self-aware. Have you ever sat with yourself and considered how much your ego impacts your relationships with clients? Is there a difference between how you treat clients based on their net worth? Do you find yourself chasing someone else’s lifestyle? Approach yourself not with a stern, fault-finding attitude, but rather an observant, neutral attitude. We probably all have clients we’re envious of, and that likely impacts the relationship in ways we don’t recognize on the surface. Working with your own financial advisor is a way to recognize unseen biases and motivations, acknowledge them, and work to correct them. 

  • Hire your own financial advisor. You can become a better advisor by improving your own financial skills. You can also become a better advisor by getting on track with your own financial goals. Your positive mindset about the power of financial planning will come through in your conversations with clients of all kinds. Getting on track with your personal financial life improves your perspective and ability to interact with others without comparing yourself to them. 

Give yourself grace. Something that contributes to egotism being toxic is the self-criticism therein. That may sound counterintuitive, but consider why we fall for egotism: Because we don’t feel like we’re enough, therefore we must force ourselves into some definition, often a harmful one, of what “enough” is. Imitating the outward trappings of success others display is not how you reach a place of personal and professional peace.

If you are an XYPN member, check out this resource from the XYPN forums on mindset versus anxiety and this resource on dealing with your own financial anxieties. Contact me if you are ready to hire your own advisor to secure the future of your family and your advisory firm!

Warm regards,

Brooklyn

P.S. At Ellevate Advisors, we believe that advisors deserve to retire too. What does that look like for you, your family, and your business? Let’s figure it out together! Check out our services here, get to know me on my bio here, or schedule your free consultation call here.