Here’s when you need a second opinion on your financial planner’s advice

Financial advisers often compare themselves to doctors. Like physicians, they provide specialized skills in dealing with complex problems. There is a big difference: when patients face a serious health diagnosis, they often seek a second opinion.

But when clients hear their advisor’s recommendations for their financial future, they rarely consider taking a second opinion from another advisor. Should they?

The second opinion is routine to follow when you are battling the possibility of life-changing illness. Instead of taking it in person, the treatment specialist encourages patients to understand the desire to collect input from another specialist and even encourages them to do so.

Advisors, by contrast, are not accustomed to telling clients, “Thanks for your advice. Now I’ll see what one of your competitors thinks.”


“Counseling is an incomplete profession,” he said. “It is a combination of art and science. So if I have no hesitation in going to another doctor to get a second opinion for my physical health, I can see how it can make sense for my financial health.

He mentions three interrelated issues for clients to consider when considering whether to consult with another advisor to make sound financial decisions:

1. Level of faith: If the advisor consistently works in a credible manner, there may be less uncertainty about accepting high-stakes recommendations.

2. The length of the relationship: If you have been working successfully with an advisor for many years, a long-term relationship in itself can help you feel more confident in this plan.

3. Track record: This is reassuring when your advisor has provided prudent, spot-on recommendations from time to time. Needless to say, it’s comfortable when an advisor shows a fall, acknowledging it and sharing a lesson learned.

Baker added that advisers, like the rest of us, are biased. If a client suspects that their financial planner’s bias interferes with clear advice, a second opinion may prove valuable.

Another red flag is if an advisor applies general rules when creating your financial plan without adapting to your unique situation, Baker said. You want someone who cares about your specific needs, risk tolerance, and other priorities, but rather adopts a cookie-cutter approach.

One of the most common reasons clients ask for a second opinion (or leave their current advisor) involves dissatisfaction with portfolio performance. They can assume that if they choose an advisor with a warm hand for stock picking, they will earn more.

Ironically, this is probably the worst reason to meet with another advisor. It is easy for someone to be proud of his skills and the investment method he owns

Another compelling reason to think about the second opinion is when you are facing a major life change such as divorce, career upsurge or retirement.

“When people come to me for a second opinion, it’s often driven by some larger life event,” said Derek Tharp, a certified financial planner in Portland, MI. “They think, ‘The situation is changing so maybe I need some new advice.’ ‘

The logistics of getting a second opinion are easy. Many advisors offer free introductory meetings where they will review an investor’s current strategy and share their perspectives.

“You may find that yours [original] The advisor was good, ”Tharp said. “But you have to be careful. You can get a sales pitch. The risk of a second opinion is that the advisor may suggest unnecessary shaking.

More: Anyone can say, ‘I am a financial planner.’ What this means is to dig deeper here.

Also read: What to look for before paying your financial advisor – and what to look for

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