An odd question but one that was the topic of a recent Michael Kitces blog where I learned about “countersignaling”. The Kitces blog is a popular one with financial planners; this one was written by Derek Tharp, a Research Associate at Kitces.com and a Ph.D. candidate in the financial planning program at Kansas State University.

A “signal” is a non-verbal way of telling others something about ourselves; for example, a well-dressed person might signal success or status. An example of “countersignaling” might be someone who signals they have a higher status by dressing down – they don’t have to dress well to impress. In other words, showing off by not showing off.

Some pop examples might be “shabby chic,” a design choice that celebrates age, wear and tear. Or think of the worn and torn jeans currently in style. The irony is that these choices can be costly – distressed jeans sell for as much as $250 – while the genuine countersignal is the pair of jeans you’ve worn for ten years.

But, back to financial planners. It seems that dressing well might be a way for newer planners to signal a higher level of competency while highly competent and seasoned planners might dress down (countersignal) to assure others they are past the point of having to impress.

The risk is that the consumer is often at the mercy of signals and countersignals when trying to choose a planner. They don’t know the right questions to ask or even what services might best meet their needs. So, in next week’s blog I’ll cover some objective ways to select a financial planner – looking beyond the look.