We’ve often quoted the Warren Buffett line that is the lead in this New York Times article to make the case that Buffett himself makes in his latest letter to shareholders: You can’t trust your investment bankers’ advice on an acquisition any more than you should ask a barber whether you need a haircut.

It’s not that investment bankers are stupid. Far from it. It’s not that they’re venal. Some surely are, but many very much have the best interests of their clients in mind. The problem is the incentives. Bankers are paid only if an acquisition happens. Of course they’re inclined to think a deal is a good idea. They make gobs of money when a deal happens and precisely nothing when one doesn’t.

Buffett is on to something when he says companies considering an acquisition should hire a second firm to argue against the deal and make that firm’s fees contingent on having the deal not happen. There’s nothing like a good argument to get all the issues on the table.

We freely admit to bias here. The sort of vetting that Buffett recommends makes up much of our business.

But we also happen to be right, and not just because Buffett says so.

One of the great lines from “All the President’s Men” is: “Follow the money.” Our research found that that idea very much applies to business, because money provides such a powerful motive. There were scores of deals that bankers recommended even though they were clearly bad ideas. Executives in consolidating industries went into overdrive to make sure they were the acquirers even when it made much more sense to be sellers; the reason clearly was that the acquirers kept their jobs and even got a bump in pay because they were running a bigger company, while those at the company being bought typically got cashiered. In the Iridium satellite-phone misadventure we chronicle in our book (where $5 billion was spent to launch a company that operated for less than a year and had its assets auctioned off for $25 million), consultants kept saying the idea made sense–and kept getting more consulting work. Even as Iridium’s prospects began to look bleaker and bleaker, executives tried to keep things going because much of their pay was in options, which would be worth hundreds of millions of dollars if Iridium succeeded but would be worth nothing if the executives decided to fold the company.

So, whether you’re thinking of buying another company or are considering some other major change in strategy, find someone who has incentives to argue forcefully against your plan.

And ask a trusted friend if you need a haircut.