Collaboration—the Future of Planning or Just So Much Talk?

What advisors need to know about teaming up with other financial professionals

By Randy Fox

Key Takeaways:

  • Collaborating with other financial professionals offers many benefits for advisors—but this can be a sensitive area for wary “lone wolves” who are used to “owning” their client relationships.
  • A professional collaboration goes much deeper than a simple referral relationship.
  • In order to work together with other professionals, you must not only trust them to do their jobs, but also trust them at a personal, intrinsic, integral level.
  • Egocentric personalities, unfamiliar compensation models, and misalignment of roles and responsibilities can cause professional collaborations to fail.

It’s practically impossible to attend a conference or have a conversation with professional colleagues without talk of collaboration coming up. Whether it’s just the current favorite industry buzzword or simply a great fallacy is yet to be determined. This series of articles will explore every aspect of professional collaboration in the context of financial advisors: what works, what doesn’t; what it is and what it’s not; what the future of collaboration looks like; why we need collaborators; and how to develop an effective collaboration. All planners make their own decisions about how best to interact with their clients. Whether you’re a lawyer, a financial advisor, a CPA or a family business psychologist and you are interested in working with families of wealth, it is likely that the subject of collaboration with other professionals will be broached. If collaboration is in your future, you should be well-informed about the process of forming a successful collaboration.

First, it’s important to understand what it is we’re trying to describe. Webster’s dictionary defines collaboration as follows:

  1. To work jointly with others or together especially in an intellectual endeavor
  2. To cooperate with or willingly assist an enemy of one’s country and especially an occupying force
  3. To cooperate with an agency or instrumentality with which one is not immediately connected

Presumably, we can eliminate definition No. 2 from this context, though for some advisors, collaboration may feel like a betrayal of their company and consorting with the enemy.

Why collaborate?

The reason we seek to collaborate is to serve our clients better. Every financial professional, no matter how skilled and experienced, has limitations. In fact, the more focused and narrow your expertise, the more likely you lack depth in other areas of the planning spectrum. If you care that those other areas are well attended to, you are a candidate for collaboration. Collaboration is not the same as a referral. You can’t just tell your client to call an attorney you suggest and hope the right planning is put in place. Rather, collaboration enables you to meet with the attorney to discuss the planning possibilities, to suggest alternatives and to coordinate strategies that will produce the best outcome for your client. Ultimately, the entire team you’ve assembled will meet with the client to discuss the members’ findings, to get the client’s feedback, to make adjustments and to proceed with the process. The client’s entire circumstance becomes the central focus, and your piece of the client’s planning becomes one of the major components. The collaboration supports the entire effort in order to provide the best outcome for the client based on the coordinated efforts of the team.

Easier said than done, of course.

Why collaboration(s) fail

On its surface, collaboration seems to be the preferential practice model for all advisors serving clients of wealth. However, successful collaborations seem to be as rare as hen’s teeth. Here are three reasons why:

1. Many advisors are deeply entrenched in their own practice areas. They often do not cultivate other professional relationships, and in fact, they often view other professionals as competitors. The strong egocentric personality that (they think) makes them successful keeps them from entertaining the idea that a conversation with another professional about their client might actually help their client. Without the willingness to leave the “self” behind in favor of the client, collaboration cannot begin.

2. The issue of compensation often clouds matters and causes pushback. Hourly rates, flat fees, assets under management, product commissions and project fees are all viable and common ways that advisors are paid. Yet professionals often view compensation methods other than the ones they use as somehow “bad” or wrong. Whether from envy or professional smugness, it doesn’t really matter. If there is a lack of agreement between professionals about compensation, successful collaboration is improbable. The other wild card in play is the client. There is often a perception from the client perspective that a collaborative arrangement of professionals is going to be more expensive. While this should not be the case, and the cost of poor planning is often immeasurable, it is yet another hurdle to overcome.

3. The understanding of roles, responsibility and accountability is challenging. Who does what, by when? Who talks to the client? When does the group talk to each other? Is there a “leader”? Whose client is it, really? These are all questions that need to be discussed and resolved before a collaborative client service project is undertaken. Many of the planning functions overlap, and often the lines between disciplines are blurry. And while some of the tasks are as mundane as filling out forms or ordering appraisals to be completed, everyone needs to agree about how those tasks will be accomplished. The planning continuum is not well understood, especially by the nonfinancial participants such as family business psychologists or legacy coaches, and everyone wants a turn to perform his or her piece. Charting out the planning progression so that each professional knows when and where he or she fits in is seldom thought of, and thus some participants begin to feel diminished in importance and resent their collaborators. This doesn’t make for a successful collaboration.


What it all ultimately comes down to is trust. In order to work together with other professionals, one must trust them. You must not only trust them to do their jobs, but also trust them at a personal, intrinsic, integral level. This is not easy for the wary and weary professional who is used to being a lone wolf, who “eats what he kills” and thinks that the client is his and his alone. Collaborations fail mostly for this lack of trust. Most professionals haven’t yet shifted themselves internally to a different mindfulness about their clients and the needs of those clients. All of the other reasons are logistical in nature and are child’s play compared to the trust gap.

Future articles will discuss how to build successful collaboration models and share case studies in collaboration and next steps. The professional who is intent on working in the high-wealth space needs to collaborate to be truly successful. Having a viable road map to building that phase of the practice model should prove valuable.

About the Author

Randy Fox is Editor in Chief of Planned Giving Design Center and is the regional representative of Charitable Giving Resource Center.