Where Do You Get Your Financial Advice?
publication date: Feb 16, 2009
Recently, a popular financial blog posted an entry entitled, "Make Money by Using Your Personal Finance Skills."
The piece was not about how to manage your own money better through acquiring and using personal financial knowledge. Instead, the piece enumerated ways that readers could literally sell personal financial advice and services.
Here are a few of the recommendations:
"Basic planning. Let's face it, almost anyone can call themselves a ‘financial planner' these days. If you have some general knowledge and the proper motive (help people at a fair price), you'll be ahead of many others out there offering their services."
"Do tax preparation in the tax season. You can either do this yourself or get a job with a place like H&R Block."
"Start a money-related website or blog."
There were some other suggestions but you get the idea.
Now, I know that for the site's writer, it is a sideline business for him (he's a full-time marketing guy at a food manufacturing company). I've corresponded with him via email and talked a few times by phone (I know his name but since it's not disclosed on the website, I won't provide it here). He's a straight-forward, no-nonsense guy and he generally steers clear of writing about personal financial planning and investing issues on his site. I think this is a wise move on his part because he lacks that training and expertise. He chose to make his site free and derive income from advertisers and affiliates whose products pay him a cut from referrals.
I took exception to this column encouraging people to sell financial or tax advice services. Here's why.
What would we think of a column that said:
"Make Money Using Your Medical Skills" and which stated that anyone can call themselves a medical care provider these days and all you need is some general knowledge and desire to help people at a fair price...
In the 1980s, when I looked into the financial planning field as a profession, it had a lot of problems regarding conflicts of interest and lack of competency and training. Over the years, I have been outspoken on these issues and received a fair amount of hate mail from planners and brokers who didn't take kindly to my perspectives. While there are still problems (as there are in any profession), the financial planning field has made important strides the past two decades. So, when I read the article "Make Money by Using Your Personal Finance Skills," I felt a bit disrespected like Rodney Dangerfield...
The Internet seems to have furthered the notion that anyone can be an expert (and goodness knows, best-selling money authors like Suze Orman and Robert Kiyosaki, who have little relevant training, reinforce that notion). Having seen the many mistakes people make in hiring bad planners, I can tell you that even more people make mistakes refusing to recognize the gaps in their knowledge and the complexity of issues and decisions they are confronting.
You can learn an enormous amount about how to better manage your money by reading good books (and being sure to sidestep the bad ones) and hiring functional area experts (e.g. tax advisor, financial planner, lawyer, money manager) when it makes sense to do so. And when you do, be sure you hire someone with extensive training, education and expertise in the relevant field. Take your time and interview them. All of my books have check lists and a series of questions to put to folks you may hire.
To access all premium content, members login here
Listen to Eric's Song
Paul Shaffer (below left) and his David Letterman Band recorded Eric's song which was written by Rock & Roll Hall of Fame song writer Jake Holmes.
Click to play Eric's song!
This song made possible by Eric's donation to