“No Charge–It’s All In the Family”

If you’re a plumber, do you send your sister a bill for replacing her leaking shower head? If you make your living as a massage therapist, do you expect your mother to pay you for her twice-monthly massages? As a financial planner, do you charge your family members for financial advice?

Financial planners, like many other professionals, may struggle with whether to give free services to family members. It’s not a question with a simple one-size-fits-all answer. On one hand, it might feel wrong to charge your parents for your professional expertise if they helped pay for the education that provided that knowledge. On the other hand, you could spend so much time providing free services to all your relatives that you didn’t earn enough to take care of your own family.

The question of how much you “owe to the family” can also affect members of professional groups. An organization might routinely pay substantial fees to outside experts for speaking at conferences or publishing articles in its publications. Yet it’s common for those same organizations to assume their members will share their expertise for free.

True, this may offer members a chance to promote themselves as well as supporting their profession. Sometimes the exposure is worth the time and out-of-pocket costs involved. Sometimes, though, the assumption that members shouldn’t be paid is an organizational money script that doesn’t necessarily hold up when members think to question it.

There isn’t any rule for determining how much of your time to give away. The one “right” answer I can suggest for this dilemma is to consciously examine your assumptions about it. You may believe “I owe it to my family to help them for free.” Or you might believe “My skills are too valuable to give away to anyone.” Either extreme is likely to be a money script that is only partially true.

In my own practice, I’m not going to send my nephew a bill for my time if he calls me to ask a question about investing. However, I do financial planning for several friends and family members, and I charge them for my services just as I do my other clients. This decision is based on much the same reason as my choice to pay another financial planner to provide services to my wife and me.

One of the most important reasons to charge for services is that anyone getting the “family discount” is likely to end up last on your list. If Mom and Dad don’t pay for their financial planning, it’s all too easy to skip over their quarterly reviews, postpone rebalancing their portfolios, or neglect to follow through on important tasks like making sure wills or medical power of attorney forms are up to date.

This neglect is likely to occur on both sides. Both the provider and the recipient tend to see free services as less valuable than services that are being paid for. There’s a big difference in perceived value between a professional service you’re paying for and a service you regard as a favor from a family member. “This is what my financial planner recommends” isn’t the same thing as “This is what my daughter or my son-in-law or my brother thinks I should do.”

No matter what your profession may be, deciding how much to do free for family members is an individual decision that ideally is made after deliberate and conscious thought. In both families and organizations, it’s necessary to find a balance between meeting family or professional obligations and putting a high enough value on your own time and expertise.

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6 Responses to “No Charge–It’s All In the Family”

  1. Joanne January 24, 2011 at 8:15 am #

    I think there should be an open, honest discussion (with a discussion list from each side) between parties to make sure there are no misconceptions. Your thoughts were good. I know professionals who struggle with this, including my hairdresser.

  2. Bill January 24, 2011 at 8:37 am #

    Very balanced and well thought out. Certainly a dilema from the lawn mowing guy to the medical specialist. Not to be ignored if you want good, clean relationships with family and friends

  3. The other Rick K. January 24, 2011 at 9:45 am #

    I have started sending my siblings to other planners and making them pay for their advice. For years, I have been given them free advice with hit or miss results. Since they don’t pay for the advice, I don’t think they take it as seriously.

    I have taken it so far as to hiring a financial planner for my self. Even I take advice more seriously if I write a check.

  4. Jeff B January 24, 2011 at 11:08 am #

    Preach it, brother!

  5. Pat J January 24, 2011 at 4:55 pm #

    It’s the physician’s dilemma as well. My philosophy is to recommend other professionals to friends and family members as I feel there are too many possible conflicts and possible bad feelings down the road. I think everyone should pay a reasonable fee for services, but really don’t want to muddy the waters in my personal relationships.


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