Comments on: MythBusters: Financial Advisors

By: Blog Carnival of Personal Finance 241st Edition | My Journey to Millions

Blog Carnival of Personal Finance 241st Edition | My Journey to Millions — Thu, 15 Apr 2010 00:39:15 +0000

[...] @ Financial Highway from Financial Highway presents MythBusters: Financial Advisors. I thought I was going to hate this post, thinking it was yet another PF blogger bashing [...]

By: find a financial planner

find a financial planner — Thu, 04 Feb 2010 03:24:01 +0000

Also, look for an advisor who has experience working with other clients in a similar financial position.

By: ETF FOOL

ETF FOOL — Fri, 29 Jan 2010 17:53:55 +0000

[...] Mythbusting financial advisors (Financial Highway) [...]

By: CJ Bowker

CJ Bowker — Tue, 26 Jan 2010 15:15:17 +0000

Financial advisers don’t last very long in this business either. Be weary of the ones that have been with a company for only a few years or have jumped around different companies. I see a lot of people in this industry that don’t make enough money trying to push products and services on people so they jump from company to company. These companies for some reason keep offering the advisers money. Managers are even worse. It’s amazing how so many advisers and managers are really bad at their jobs.

By: Carnival of Personal Finance #241 : Carnival of Personal Finance

Carnival of Personal Finance #241 : Carnival of Personal Finance — Mon, 25 Jan 2010 19:15:31 +0000

[...] Buffett the dividend investor A Gai Shan Life: I don’t want to retire Financial Highway: MythBusters: Financial Advisors Planting Dollars: Being Rich versus Being Wealthy Len Penzo dot Com: When Pigs Fly: How I Fought My [...]

By: Tax Guy

Tax Guy — Mon, 18 Jan 2010 21:17:11 +0000

I’ve worked in the industry for over 15 years (not as a financial advisor) and speak with financial advisors daily. I am shocked at how little they know about very basic investment issues. I have come across advisors who have 10+ years of experience and have no idea what an income trust is (they seem to think REITs pay dividends). Even those who are CFP often shock me with their level of knowledge.

By: Craig Ford

Craig Ford — Mon, 18 Jan 2010 19:33:42 +0000

I think myth 1 is the most dangerous. When I started investing my attitude was – well you’re the person who knows all this stuff so how can I question you. Thankfully, my thinking is a lot better now. I’ve realized I care more about my money than some stranger in an office and that helps me make wise choices about investments. Now I always learn about the investment before I invest.

By: Best of Personal Finance Roundup: 20+ Amazing Fitness Blogs to Inspire You- Financial Eyes & Ears

Mon, 18 Jan 2010 19:10:34 +0000

[...] MythBusters: Financial Advisors — Many times we take too much solace in having a financial advisor. Know these common myths surrounding the relationship, and find out how you can keep control of your money. Financial Highway [...]

By: Ethan

Ethan — Mon, 18 Jan 2010 17:59:21 +0000

What you want to find is a fee-only advisor who uses low-expense index funds to track asset classes. They should charge no more than 1.5% of assets under management as an annual fee, at the high end. Their ongoing role in your financial life should include:

1. Managing the allocation of your money among several asset classes to reduce volatility, remove uncompensated risk, and match your changing goals as your life progresses.

2. Rebalancing your funds among the asset classes as performance variations push your allocation off target, in accordance with a written investing policy.

3. Keeping your taxes and investing fees as low as possible, preferably in concert with your CPA if you use one.

4. Advocating for your net worth by showing you how and why to save money, track spending and make better decisions.

5. Advise you to carry appropriate insurance products and have up-to-date estate planning documents at all times. A true fee-only advisor makes no money from this advice, whatsoever.

Sometimes there is only one of these guys in town, if that. Their office will probably look shabbier than the rest. They almost certainly won’t own a yacht, though a few of their clients might.

None of the certifications mean jack. All they are is a handful of community-college level courses and a multiple choice test, plus some time in the industry. There is no reason that time can’t be spent screwing people out of money. Ignore the certifications and make sure they are proposing the things I listed. The only exception would be the PFS certification, which is only available to CPA’s. They will usually have a leg up on the tax side of things. Still doesn’t say anything about their investing advice, however.

By: Aaron @ Clarifinancial

Aaron @ Clarifinancial — Mon, 18 Jan 2010 13:06:30 +0000

Ray, this is a good series you’re putting together. Because the phrase “financial advisor” is unregulated, virtually anyone doing anything with finance can use it.

Something to note about becoming licensed or registered: A passing grade on many of these tests is a 70%. That’s a pretty low standard in my book.

Also, make sure you scrutinize things they say. I had someone call me on my business phone last week to talk to me about my insurance (I know, right). He said, “I’ve been in insurance for a while and something I’ve noticed is…” When pushed, he told me that he has been in insurance for 6 months. While he wasn’t lying, he was inflating the impression of his actual experience.