Given the wide variance in training, experience, and incentives that
financial advisors operation under it is really hard to know who to trust.

This is a huge issue within the industry. How can you distinguish the
conflicted sales people from REAL financial planners.

I wish there was a clean answer, and I think the industry is really focused
on coming up with one, but that process will take a while to work out. In
the mean time ask people you trust for a referral, meet, verify, trust,
verify, and hopefully it will work out.

I will be writing more about the topic of how to find a real planner soon.

In the mean time, what do you think? How do you find a REAL planner?

Point taken- I agree you don't need a medical degree to be a patient but I do think you should educate yourself especially if there are multiple treatment options available. Without basic knowledge, how do you know your doctor isn’t a quack?

I think the level of trust is worse in the financial industry because it is common to find salesmen pushing bad investments, like annuities. I wouldn't be surprised if that is the only type of financial advisor many people have ever encountered. The other complication is that even a trustworthy person can have biases. For example an honest insurance salesman won't try to swindle you on a policy by hiding information like the fees and rates of return… but they may still believe whole life insurance is a wonderful investment for everyone.

-Rick Francis

That behavioural mistake, I think, is supposing that subjects can be studied atomically, as separate parts. A good financial planner both understands how their client's investment needs fit into that client's over-all well-being, and cares enough to make that understanding a necessary condition of their relationship with the client.

Studying investing yourself is nice, but all the study in the world won't give you the objectivity of a planner's external viewpoint, the efficient division of labour they provide, or the context that differentiates a good investment from successful investing.

Given the wide variance in training, experience, and incentives that
financial advisors operation under it is really hard to know who to trust.

This is a huge issue within the industry. How can you distinguish the
conflicted sales people from REAL financial planners.

I wish there was a clean answer, and I think the industry is really focused
on coming up with one, but that process will take a while to work out. In
the mean time ask people you trust for a referral, meet, verify, trust,
verify, and hopefully it will work out.

I will be writing more about the topic of how to find a real planner soon.

In the mean time, what do you think? How do you find a REAL planner?

Point taken- I agree you don't need a medical degree to be a patient but I do think you should educate yourself especially if there are multiple treatment options available. Without basic knowledge, how do you know your doctor isn’t a quack?

I think the level of trust is worse in the financial industry because it is common to find salesmen pushing bad investments, like annuities. I wouldn't be surprised if that is the only type of financial advisor many people have ever encountered. The other complication is that even a trustworthy person can have biases. For example an honest insurance salesman won't try to swindle you on a policy by hiding information like the fees and rates of return… but they may still believe whole life insurance is a wonderful investment for everyone.

-Rick Francis

That behavioural mistake, I think, is supposing that subjects can be studied atomically, as separate parts. A good financial planner both understands how their client's investment needs fit into that client's over-all well-being, and cares enough to make that understanding a necessary condition of their relationship with the client.

Studying investing yourself is nice, but all the study in the world won't give you the objectivity of a planner's external viewpoint, the efficient division of labour they provide, or the context that differentiates a good investment from successful investing.

This is a sad commentary on the state of the advisory business, but from my perspective I would ask, when you go to see the doctor do you need enough knowledge about medicine to know if you the doctor's advice is really good?

Now I realize that most people experience with the financial services industry has been anything but professional, but that doesn't change the fact that there are REAL financial planner out there that can be trusted. Finding them might be hard, in fact it might be so hard that you have stopped trying, and that is fair enough, but that they are out there.

[more on this in an upcoming post]

A very good point to remember, you can ruin a great investment with bad decisions. Of course you have to make sure that your planner doesn't make bad decisions either! That makes me wonder- do you have to know enough to advise yourself to know that an advisor's advice is really good?

-Rick Francis

So here is the deal, I expect everyone to act like guests at a dinner party, you can have opinions but it would be considered rude to completely dominate the discussion. If you continue to dominate the discussion over and over, then either you need to be uninvited or everyone else will stop coming.

I respect Rob's passion for his point of view. I respect the amount of research and thought he has put into it, I just don't think the comment section of my blog is the place for it over and over.

If you are interested in talking this over you can email me.

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