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Sharing same FA with parents-Conflict of Interest

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  • Sharing same FA with parents-Conflict of Interest

    I'm trying to help consolidate my parents finances and at a loss with some annuities they have and how they best should structure their plan. both in 80s, debt free, live off SSA and pensions. Most of what they have is in liquid cash savings, CDs as they've always been on the conservative side. What is the general consensus about sharing same FA with parents? I'm not wanting to be stuck working with one that I realize is not the right fit for me in the future because my parents like him/her. Alternatively is a fee only FA appropriate for parents at this stage in their life?

  • #2
    Just a quick reply. I don’t see why your parents like him. Do you?
    Does not seem to have added much value.

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    • #3
      I was speaking hypothetically. As I'm interviewing FA candidates for my parents I've had one fee-only FA send me a link to capture my business.

      I also interviewed a fee only FA (who I do like) for myself and asked about my parents situation. While I am strongly considering hiring this person for myself I have reservations about whether there would be conflict of interest using same FA for parents (in the event relationship went sour on either end).

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      • #4
        It seems like the potential conflict of interest would be more on the estate planning side of things with parents/siblings than on basic financial planning. I don’t see how having the same FA would create a conflict. I would expect a FA to provide different advice to a couple in there 80s versus their younger adult child, but where’s the conflict?

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        • #5
          Actually, sometimes it is an advantage.
          The two relationships typically are more valuable than the most significant client. A wealthy parent can get a child starting out similar services. A wealthy child can get the parents better service.
          You are correct, if the “big dog” leaves, a remaining client might get less attention or be perceived as less desirable. I don’t think this should be an issue.

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          • #6
            I don’t see how your parents’ feelings toward a financial advisor would have any bearing on you feeling stuck with using him (or not) for yourself.

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            • #7
              If you have a common name like Smith then the advisor likely wouldn’t even know you’re related. I wouldn’t really see how the advisor would care anyway.

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              • #8
                In some cases, it is optimal, especially if there are large amounts of assets or complicated assets that will be transferred from one generation to the next. This is often the case in the "Family Office" model.

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                • #9
                  Originally posted by VagabondMD View Post
                  In some cases, it is optimal, especially if there are large amounts of assets or complicated assets that will be transferred from one generation to the next. This is often the case in the "Family Office" model.
                  This, exactly.

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