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5 Traits of a Qualified Financial Sounding Board

June 11, 2019

Most people appreciate the benefit of having a sounding board - someone they can bounce ideas off - for decision-making purposes. The opportunity to “think out loud” and get feedback from someone we respect and who understands us can be helpful. A back-and-forth exchange helps us think more deeply and creatively, often generating ideas and solutions we may not have come up with on our own. Simply put, a sounding board helps us make better decisions.  


Depressed man thinking at home on couchWhen it comes to wealth management decisions, chances are you don’t have a sounding board. In our 35-year history, less than five percent of people we meet have a trusted resource for discussing finance-related ideas and concerns. The desire for a sounding board also increases proportionally with the amount of wealth due to the increased complexity that often accompanies financial success.

Without a knowledgeable and trustworthy confidant to talk to about financial questions, ideas, and concerns, people can make costly mistakes. For example, prior to engaging us, a couple received a substantial financial windfall that was unfortunately accompanied by a large income tax bill. A brainstorming session prior to receiving the windfall would have resulted in a recommendation that avoided most of the income taxes. Another client was building a second home and was considering an expensive approach to finance the project. Serving as a sounding board, we redirected them to a less costly approach.  

Sometimes topics that benefit from a sounding board are more traditional, such as when to start social security, whether to purchase long-term care insurance, or if it makes sense to pay off a mortgage. Regardless, clients feel more confident about their decision after discussing the topic with a trusted expert.

Why Most People Don’t Have a Sounding Board     

High net worth families and individuals typically don’t have a good sounding board for several reasons. Family and friends often don’t have the expertise necessary to provide financial advice. While some may turn to a professional advisor like an accountant, investment advisor or lawyer, this doesn’t always work either.

For starters, there is a general distrust of the financial services industry. Another problem is most advisors are compensated on a transactional basis, which is either based on investments transferred under the advisor’s management or the purchase price of a product. A sales agenda isn’t conducive of a productive conversation. Lastly, most advisors have only a narrow window into the qualitative and quantitative aspects of a client’s situation. This incomplete view limits the opportunity for meaningful dialogue.

Prerequisites for a Good Financial Sounding Board

The best sounding boards have the following five traits:

  1. No predetermined agenda
  2. Financial acumen
  3. Common sense/good judgement
  4. Relevant experience
  5. Understanding of your complete situation (qualitative and quantitative)

Interestingly, the very best sounding boards are secure enough to acknowledge when they can’t help solve a particular issue. But they don’t stop there. They pivot from the issue to brainstorming about other professionals they know who can help solve the issue.

How to Find a Qualified Sounding Board

A good sounding board is difficult to find as the five criteria mentioned above are rarely found in a single individual. Trust and chemistry – which arise from the five criteria - cannot be manufactured. However, here are a few suggestions to help you in your search.  

Start with your current advisors, and specifically your accountant. An accountant probably checks most of the boxes on the list above. After that, the options drop off quickly in terms of traditional financial advisors.

If your accountant isn’t the right choice, consider a financial advisor who is compensated by the hour, project or a flat fee. All other types of advisors will come with a predetermined agenda, which is a non-starter. To learn more about identifying an advisor who is right for you, consider reading How to Find Your Ideal Wealth Manager.

Don’t Delay

When we survey clients about what aspect of our services they value most, acting as a sounding board is always at or near the top. Our Personal CFO’s spend the majority of their day serving as a sounding board to clients. It’s not unusual for us to provide significant quantifiable results for a client, like an income tax reduction or handsome investment returns. But, when we ask them about the biggest benefit of being our client, the answer is not the money saved or made, but the sounding board that we provide.

If you are making financial decisions on your own or with someone you would consider a less-than-viable sounding board, you may not be making the best decisions. This may hinder the growth of your wealth. With a qualified sounding board, your financial results, confidence, and peace of mind will soar.


Find Your Ideal Wealth Manager



Filed Under: Successful Investing

Written by PartnersInWealth

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