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By Eric Croak · Updated April 7, 2026
Expertise alone isn’t enough.
A couple of illustrative cases in point:
On the night before the Challenger launch in January 1986, Morton Thiokol engineers told NASA the O-rings would fail in cold weather and recommended against launching. Their warning reached the program managers. But it didn’t reach the senior officials responsible for signing off on the flight. The Rogers Commission later concluded that had the decision-makers been aware of the danger, they would almost certainly not have launched.
The information existed within the team. It was accurate. But it never made it into the right hands in time to influence the decision.
More than two decades later, the Financial Products division at insurance giant AIG wrote roughly $440 billion in credit default swaps tied to subprime mortgages on their own initiative. But their massive exposure to mortgage default risk — equivalent to roughly five times the company’s book value that June — was invisible to the most senior executives responsible for the survival of the company… until it was too late.
The department was happy to report profits from its credit default swap operations. But it didn’t report the risks they were running. And senior executives, happy to report the profits to shareholders, failed to look closely enough at how the sausage was being made.
When the mortgage market collapsed, the AIG was on the hook for losses its own leadership did not even realize it was exposed to. The Federal Reserve had to extend an $85 billion emergency credit line to prevent a systemic collapse.
The contexts are very different. But the problem is an ancient one: Accurate information is compartmentalized, trapped inside a department or a team with a narrow set of expertise. The information decision makers need doesn’t reach them when they need it.
Decision-making is impaired, with expensive and sometimes disastrous results.
The problem is called “information stovepiping.” And it doesn’t just affect large institutions like NASA and AIG. It also affects families.
Why High Earners With Multiple Advisors Still Overpay in Taxes
Many affluent families assemble their advisory teams the old-fashioned way: Gradually, as the family wealth grows, one professional at a time.
A CPA handles the tax returns. An investment advisor manages the portfolio. An estate planning attorney comes along later to draft some documents. An insurance specialist gets added eventually, as the family becomes more risk aware. Each of these individuals is extremely competent. Each of them works well in their own lane.
But nobody is responsible for what happens across the seams, and nobody on the team is responsible for seeing the big picture.
A fragmented advisory team occurs when a household’s advisors—CPA, investment manager, and estate attorney—operate independently without shared visibility into each other’s work. Decisions made in one area create unintended tax and financial consequences in another, and no one catches them until tax season forces the full picture into view. |
This is the information silo problem in personal finance: It’s not that any single advisor is doing bad work in their own field of expertise. It’s that the right hand too often doesn’t know what the left hand is doing. Decisions get made in isolation. Opportunities that require coordination go unrealized. And risks that are only perceivable to someone who can look at the whole picture stay hidden.
Until the tax filing process — or worse, the probate process — forces a reckoning.
Common Information Stovepiping Mistakes
While every family’s situation is different, there are a few patterns that seem to emerge, time after time.
- Scenario 1: The family’s investment portfolio that generates significant capital gains in a bumpy but strong market year, with few or no capital losses harvested during the year to offset them.
This happens because the investment advisor and CPA weren’t comparing notes during the year.
- Scenario 2: A couple makes plans to sell an investment property they’ve owned for many years to raise cash for retirement living expenses. Meanwhile, their investment advisor executes a large Roth conversion to help protect them from the risk of future income tax increases and to reduce RMD exposure later in life.
Both are perfectly reasonable courses of action, taken in isolation. The problem comes when the couple sells the property: The extra ordinary income they realized when they did the Roth conversion pushed them into a higher capital gains tax bracket. They found they had to pay tens of thousands of dollars in capital gains taxes they weren’t expecting, because no one scrubbed the Roth conversion strategy against the real estate strategy in time.
- Scenario 3: A pass-through entity tax election, one of the most valuable tools available to business owners in Ohio, gets filed late, or not filed at all, because each advisor assumed one of the others was tracking the deadline.
- Scenario 4: An estate planning attorney creates an exquisitely drafted trust. A trust so strong and well-crafted that generations of law professors include a copy in their curriculum for 2nd-year law students.
And then it gathers dust on a shelf, because no one on the family advisory team is responsible for ensuring newly acquired property is transferred to it, or for keeping beneficiaries updated or ensuring successor trustees are in place for when the inevitable happens.
The result is a long, protracted probate process—and potentially the accidental disinheritance of beloved children, grandchildren, and stepchildren (and the enrichment of ex-spouses). Individually, each of these errors looks like a missed detail. Except for the fourth one, the family will eventually recover from it. And the problems can even remain undetected for years, unless you know what to look for.
But cumulatively, patterns like this add up. Taken together, they cause significant financial friction, and are serious inhibitors to wealth creation.
They are also unforced errors.
Coordination Alpha – The Value of Improved Process
In an investing context, the term alpha means the extra value you get beyond what you would normally expect from the market risk you took.
But that’s a very narrow definition of alpha. In reality, there are many ways that good advisors can add alpha. For example, tax alpha is the amount of additional after-tax return you keep because your advisors made smarter tax decisions than a less careful investor or advisory team would have made.
That’s real money in your pocket.
But there are more ways to add alpha. Advisors working in coordination, against a shared picture of the household’s goals and constraints, consistently outperform the same advisors working in parallel. Adding this kind of coordination and execution alpha is much easier and more reliable, on an after-tax basis, than squeezing a few more basis points out of an already-optimized investment portfolio.
For most affluent and wealthy families, the fix isn’t adding more advisors. It’s explicitly assigning one person on the team whose job is to maintain overall situational awareness, and coordinate the different disciplines in support of the family’s overall objectives.
Here’s what that looks like, in practice:
- The entire team knows what the CPA is seeing before year-end, not when they’re assembling the tax return in April. And vice vera.
- The team understands when a decision about a brokerage account or a real estate transaction has downstream consequences for the estate plan. Because the team captain or coordinator knows to engage the right professional before it becomes a problem.
- It means the tax and investment professionals get together to run a detailed tax projection in the 3rd quarter, while there is still time to act, rather than discovering what last year’s suboptimal decisions cost in February.
- Tax-loss harvesting happens systematically, with losses sold off multiple times per year, because the investment advisor knows the household’s full gain-and-loss picture, knows what’s happening in the markets, and can execute before the opportunity is lost.
- The tax advisor knows almost precisely how much in IRA and 401(k) assets to convert to Roth assets each December, and doesn’t have to guess. She’s informed about the family’s future plans to sell real estate or other accumulated assets, or enroll in Medicare, so that the Roth conversions, combined with other income, won’t accidently trigger higher capital gains tax rates or higher Medicare Part B and D premiums under IRMAA.
- The team tracks business tax elections without the client having to remember to ask them.
No doubt you have competent advisors. But are they delivering to this standard as ateam?
When we onboard a new client, here are the questions we ask to determine the answer:
1) Does anyone on the team have visibility into what the others are doing, outside of your own conversations with each of them?
2) In the past year, did your investment advisor and your CPA speak directly to each other — not through you as an intermediary — about your tax position before you and your team made any significant portfolio decisions?
3) Can anyone on your team tell you, without asking you to gather the information yourself, what your projected tax liability looks like for the current year?
If the honest answer to any of these is no, you may have a structural gap.
That doesn’t mean any of your advisors is incompetent or not putting in the effort. We find that they are often excellent at their jobs. They just need more effective direction and coordination.
Many times, what’s missing is a defined owner for the interdisciplinary issues. Someone who tracks the full picture across multiple domains, who is accountable for coordinating the efforts of subject matter experts, who makes sure the pieces move together, and who has the experience and expertise to do so.
Not everyone does. For households managing significant complexity — business income, concentrated equity, real estate, trusts, or multi-generational planning — introducing that integrating function, and capturing coordination alpha, is a high-payoff initiative.
If you are in this situation, and this kind of coordination is something you want to harness for your own family, I invite you to drop us a note. We’ll be happy to schedule an exploratory meeting, and see if it makes sense to move forward.
Also Read:
How to invest $5M+ after selling my company: Do I need a family office
Risks of keeping $5M+ in one bank: how do UHNW families manage wealth safely
What a Fiduciary Approach Means for Post-Exit Entrepreneurs and High-Net-Worth Families