Should You Treat Your Family Like Clients?

I went through his top picks and I was finally like, “You know what, I will buy a duplex, and you can rent one side from me, manage the other side of the property, and then when you're older you can buy the duplex as your first home."

As a financial advisor (FA), I am quickly running through the math and coming out cash flow positive in this scenario. A duplex property is a good investment for me; a significant population here are either medical professionals or the military. A nice rental property is in high demand and is often rented the same day. My son and his friends would cover the mortgage, although I expect they will spend an obnoxious amount of time online playing video games. Hey, at least they are young adults that I have met IRL (in real life, if you're not parenting a gamer).

Oh, and a bonus! My son would learn the responsibilities of being a landlord. I would not have the hassle of managing a rental. He would. Ha, how is that for complaining about taking out the trash? He has no idea just how good he has it living at home. Give him a tenant or two to manage.

When he has established some credit history and earning capacity, he could buy it – what a perfect setup for starting his financial responsibilities in life.

Just as I am about to articulate my five-year plan for how I have solved our housing problem, set my son up for his financial future, and sprinkled in a teachable lesson for the kid – I stopped myself.

Would I tell a client to do this? It's something my mastermind group has said a few times when we are problem-solving together.

If I remove myself from the equation and a client told me this plan, would I encourage them to move forward with it?

No. Hell no at that.

I would not tell a client to move forward with buying a duplex so their adult child has a place to live. Instead, I would be cautioning them on all the reasons why they should not proceed with this plan:

What if he loses his job and can't afford the rent? Am I going to kick him out?
What if his roommates trash the place, and I know it wasn't his fault? Am I going to make him pay for the damages?
What if he violates a landlord-tenant law, and now I find myself in litigation?
What happens the next time he has a problem, and you jump in to solve the problem for him?

This is the moment I would give my clients some tough advice. As an FA, my job is to listen, understand and help clients make sound financial decisions. Sometimes (more often than you think) that comes with bringing up the questions they don't want to answer – the "what happens when…" questions.

If I ran out and bought a duplex for my son, I would be depriving him of all the coming-of-age hardships that help shape who we become as adults.

Finding your first apartment should be challenging, and he should experience some stress in doing so. He should worry about security deposits, leaky faucets, and unruly neighbors. I did at his age, and as I progressed in my career and moved into my first real home, I was profoundly grateful. I appreciated buying my first home.

As a parent, though, I am not looking forward to watching him struggle. I don't want to see him in an unsafe, lousy apartment where I have to worry about him. On the other hand, my spouse and I raised him to be financially responsible and grateful… so… what if I am different?

What if all the reasons I would tell a client not to do it don't apply to me?

I didn't want to come to a decision too quickly and, of course, would need my spouse to weigh in before I did something like buying a duplex without all of us being a part of the plan. Trust me, I almost bought a business without it being a family decision, and that did not go over well. Lesson learned. Communication is key.

After all, this is our son and it would be our rental property. Deciding this without the other half weighing in is… well, let's just say I wouldn't have to wonder who would rent out the other half of the duplex – it would be me.

My spouse was 100% onboard with buying the duplex so that our son would have a nice, safe place to live.

The more my spouse agreed, the more that I kept hearing my mastermind proposing the question, "What would you tell a client to do?"

But neither of them is my client. They're my family – my immediate family at that. Should I treat them like I would a client, or are the rules different for me because I know all the things that can go wrong so they won't, or if they do, I know how to handle them?

I am the financial professional.

The RIA space is lonely, and here, as I faced making a challenging emotional and financial decision, I felt it even more so. Two sides of me were in conflict: emotion and finance. This scenario is just one of many that came up when I could use the sounding board of other like-minded like valued-based people to bounce ideas off. Even if bouncing those ideas only means reinforcing what I know that I need to do.

What is powerful about finding and working with the right mastermind groups is that if you do, that loneliness of feeling like you're " all on your own" starts to fade away. There are more good, honest, driven, and values-based FAs in the planning profession than what we may realize.

Members of the mastermind are often super successful, competitive, and inspiring. Yet they struggle with the same things most FAs do: head trash, imposter syndrome, and questioning whether or not they were providing enough value to their clients to justify their income.

My mastermind uses one strategy: each FA must bring one problem or goal that they need to solve. Then, at the very end of the mastermind, each FA brings up their problem or goal, and it's an open forum for problem-solving – think less like people working together to make it out of an escape room and more like being in front of a jury of your peers.

It isn't for the faint of heart.

Imagine sitting at a table with five other like-minded financial professionals who are all in the business of helping people plan and want to see you succeed. You present a problem – it doesn't matter what it is. "My team can't handle what I delegate to them, I spend 20 hours a week on emails, I want to double my earnings before owners compensation but don't want to have to work more." Someone is there with a fresh perspective and a solution. Oh, and they destroy any excuse you give with them with reason and a rational perspective. Painful.

As FAs, we have hundreds of clients and thousands of stories. We help people navigate through so much more than just money. The advice that most of us give our clients is good – really good advice.

The advice we give as FAs is solid. How many times have you had a client come back and thank you for guiding them through a difficult decision?

Shouldn't we be listening to our own voice, too? That is why we have a rule at our firm that if we wouldn't tell a client to go and do it, we won't either. If the advice we give is good enough for our clients, it is good enough for us. We are no different than the people that we serve.

We forget that as FAs, because we do not dedicate enough professional development time to being surrounded by like-minded people. We do not carve time out to be a part of masterminds that will forever change our personal and professional lives because we think we have to do it all on our own.

Joining a mastermind will be the greatest professional move you perhaps ever make in your career.

Those simple words provided by the mastermind, "What would you tell a client to do?" echoed in my head. I knew that I would be accountable to my peers if I did something that I knew, without a doubt, I would tell a client not to do.

Do you have this introspection too? As an FA or a company, do you stop and ask yourself, is this what we would tell a client to do?

There is no need to forward this article to a realtor; I won't be buying my son a duplex to solve his rental problems. The struggle may be hard, but struggles are also the very reason we become better. I learned more from struggle, failure, rejection, and regret than I ever have from my successes. It isn't my place, even as his parent, to deprive him of that.

You can, however, forward this to someone you know who sometimes forgets that the advice we give our clients is the advice we should take ourselves.

Jamie Shilanski is a Registered Financial Consultant® for Shilanski & Associates, Inc. As an RFC® she helps clients understand the various options and nuances of financial services so they can make informed decisions. In this discipline, she customizes a financial plan that fits their unique set of circumstances.

Read more articles by Jamie Shilanski