I Guess So Called Financial Experts Are Not

target2019 said:
You lost me on that one. Man's grasping nature?
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Yes. The eternal desire for "more" than we have. There is an entire commandment (the 10th) dedicated to combatting that precise desire. "Thou shalt not covet thy neighbour's house, thou shalt not covet thy neighbour's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour's." Exodus 20:17 (KJV). Coveting his money is just a different form of coveting all the things that are specifically listed.
 
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Would like an opinion on this scenario:

You, an investor, receive a business card from an FA. The business card has various license designations. You decide to meet with him/her. What sort of questions would you ask to test his knowledge and success?

Would you ask about his/her personal success? What is their financial situation personally?

Would you ask how many years they've been active? Who are their clients?

A relative of mine just passed a test and has some kind of financial designation. He/she bought business cards and is passing them out and making cold calls. He/she is absolutely terrible with money. Has enormous debt. Makes bad financial decisions. How does that information get passed to innocent clients? Does their affiliation with a well-known large financial company make you think they are legitimate?
 
I don't really use a FA although I have a couple available to me (for free). I will comment that just because someone has the fancy designation(s) behind his/her name doesn't necessary mean they are experts (or even any good). I always felt if a FA is "so good", why are they still working? :)


I know when I was still working I had a couple of the most prestigious industry designations/certifications, in my field, on my business cards. All I needed to do to get them was study a little, pass a few tests, demonstrate I worked in the field, and then I was given the right to use the titles/designations. I certainly never considered myself an expert in my field.
 
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Rianne said:
Would like an opinion on this scenario:

You, an investor, receive a business card from an FA. The business card has various license designations. You decide to meet with him/her. What sort of questions would you ask to test his knowledge and success?

Would you ask about his/her personal success? What is their financial situation personally?

Would you ask how many years they've been active? Who are their clients?

A relative of mine just passed a test and has some kind of financial designation. He/she bought business cards and is passing them out and making cold calls. He/she is absolutely terrible with money. Has enormous debt. Makes bad financial decisions. How does that information get passed to innocent clients? Does their affiliation with a well-known large financial company make you think they are legitimate?
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I suspect there is a good chance that you would likely get a song and a dance regarding their personal success. If they have been around a while, they will tell you that without you asking. If not, they have no reason to object to the question. They might give you general information regarding their client profiles, but I wouldn't think that they would disclose people by name. (It's different if you represent a large commercial client, but I would "guess" that the financial advisors that you would meet would not have commercial clients.)
 
RobbieB said:
And back to people.

So today my wife suggests that maybe we just cash her fathers IRA check and put the benji's in the safe?

I say what?

You know because the banks are failing...
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You should make her feel better by explaining the government owns the printing press. They can collectively make as much cash as "needed" and can also magically add money to the money supply digitally.

Thus, if the SHTF, that cash in the safe will be as worthless as cash in the bank.

This should make her feel better. :D
 
Rianne said:
Would like an opinion on this scenario:

You, an investor, receive a business card from an FA. The business card has various license designations. You decide to meet with him/her. What sort of questions would you ask to test his knowledge and success?

Would you ask about his/her personal success? What is their financial situation personally?

Would you ask how many years they've been active? Who are their clients?

A relative of mine just passed a test and has some kind of financial designation. He/she bought business cards and is passing them out and making cold calls. He/she is absolutely terrible with money. Has enormous debt. Makes bad financial decisions. How does that information get passed to innocent clients? Does their affiliation with a well-known large financial company make you think they are legitimate?
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Spouse has a nephew who went in with Lincoln Financial. Never finished college, kind of a free spirit, but seemed to get to more solid ground with a family.

They took him and others to England for seminar, and so on. For whatever reason he washed out of LF. I don't know if it was choice, the axe, or whatever.

In any event, I imagine some are susceptible to a sales pitch from a nice guy. And he was that as I recall--a nice guy.

Older folks grow more and more susceptible to the pitch. That is what I've seen.

I think if you go into a meeting with a sales person, harden yourself to any rash decision, being gracious, but know it is probably gonna set you back on your investment path.
 
Gumby said:
Not money in and of itself (which is a morally neutral tool), but the LOVE of money is the root of all evil. It's an important distinction. Even if we had no such thing as money, man's grasping nature would lead him to do evil.
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+1. I get that.
 
MarieIG said:
I suspect there is a good chance that you would likely get a song and a dance regarding their personal success. If they have been around a while, they will tell you that without you asking. If not, they have no reason to object to the question. They might give you general information regarding their client profiles, but I wouldn't think that they would disclose people by name. (It's different if you represent a large commercial client, but I would "guess" that the financial advisors that you would meet would not have commercial clients.)
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I fear for he/she clients. In a dressed-up office, he/she is somewhat charming at first and knows very little about investing. The well-known company he/she represents is pushing annuities. These financial designation tests are like the SAT. Multiple choice and academic. There is no internship or training. It is set up in a way that he/she brings x # of possible interested investors. Could be your neighbor who wants to be polite and show interest. Then the big guns start making the calls and the relative gets a cut of the fees once the product is sold.

Maybe I'm naive, but I know some of these people this relative is trying to bring on as clients.
 
Rianne said:
I fear for he/she clients. In a dressed-up office, he/she is somewhat charming at first and knows very little about investing. The well-known company he/she represents is pushing annuities. These financial designation tests are like the SAT. Multiple choice and academic. There is no internship or training. It is set up in a way that he/she brings x # of possible interested investors. Could be your neighbor who wants to be polite and show interest. Then the big guns start making the calls and the relative gets a cut of the fees once the product is sold.

Maybe I'm naive, but I know some of these people this relative is trying to bring on as clients.
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IMHO, you are quite right. There can be huge commissions in annuities; and friends, relatives and neighbors can be easy targets.

(Not the same thing, but I recall looking for a job shortly after graduation. It turned out to be marketing - and the would be employees were told to solicit their friends and relatives. Needless to say, it did not appeal to me in the slightest and I could not get out of there fast enough.)
 
Rianne said:
A relative of mine just passed a test and has some kind of financial designation. He/she bought business cards and is passing them out and making cold calls. He/she is absolutely terrible with money. Has enormous debt. Makes bad financial decisions.
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Education and certifications can have zero correlation to personal financial responsibility. Years ago I watched the repo guy haul off our company CFO's Mercedes from the parking garage.
 
It’s those exogenous events that come out of nowhere and many times are not financial in themselves that keep me on the more conservative side of the fence. Covid and the current land war in Europe are good examples.

Even if the current bank crisis could have been avoided by better regulation and management there are always other unknown dangers out there. Wisely done diversification is the best defense in the long run.
 
REWahoo said:
Education and certifications can have zero correlation to personal financial responsibility. Years ago I watched the repo guy haul off our company CFO's Mercedes from the parking garage.
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Yup, csome people are very good business people but a disaster when it comes to personal finance. See it all the time.
 
REWahoo said:
Education and certifications can have zero correlation to personal financial responsibility. Years ago I watched the repo guy haul off our company CFO's Mercedes from the parking garage.
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That's actually kind of funny although one would logically think that would be a red flag in and of itself. If he/she couldn't manage personal finances, what indicator is that, that they could competently manage or advise on a company's finances ? Back in the day when I was coming up through the ranks, even a divorce was a black mark in the corporate eco-system/promotion food chain.
 
pb4uski said:
Yup, csome people are very good business people but a disaster when it comes to personal finance. See it all the time.
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I know someone who does acc’t and taxes for local small businesses. He says the above quote describes more than half of his clients.
 
MichaelB said:
I know someone who does acc’t and taxes for local small businesses. He says the above quote describes more than half of his clients.
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Our CPA frequently tells me how impressed he is by how we manage our money. He has many clients who are very successful in their business lives but much less so in their personal lives.
 
REWahoo said:
Education and certifications can have zero correlation to personal financial responsibility. Years ago I watched the repo guy haul off our company CFO's Mercedes from the parking garage.
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Damn!
 
I would not characterize the Challenger explosion as greed. This was political grandstanding that managed to invert safety logic from "proving a launch was safe" to "proving the launch would blow up". Paying people not to see a truth is the easiest way to obscure the obvious. Feynman's book on how he asked the right questions and connected the dots is a great read, and a great rational mind at work. Bureaucracy, groupthink, diffusion of responsibility. not greed.

The 737 mess may well have some involvement with greed, but it is moreso an example of how rigid regulatory structures interact to create regulatory capture. Boeing got lazy with an ancient design that was no longer as relevant to modern airports. It is so difficult to jump through regulatory hoops for a new airframe that they overextended the design life.

Instead of improving safety, the regulatory regime is being used to prevent change, protect monopoly, and generally gum up the works. The same regulatory mindset that has me flushing toilets 3-4 times instead of once has a much more fatal outcome in plane design regulation.
 
luckydude said:
I am sure Jim possesses some level of financial knowledge, but as the 2008 financial crisis showed, working at an investment bank or running a hedge fund is unfortunately not a guarantee of high level of financial acumen. I personally know a couple of hedge fund and investment banker types whom I wouldn't trust to invest $10.
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Speaking of Jim Cramer, I used to watch his show occasionally to see if I could learn anything back when I still had CNBC on cable (I stopped watching TV at least 15 years ago), and I remember liking his interviews with CEOs.

I never followed his stock picks so do not know how one would fare, but have seen plenty of examples showing how wrong Jim was. This leaves one scratching his head trying to see how he got his money. And I think he has more money than you and me, even before he got paid for being on TV.

So, perhaps he's not a long-term investor like Buffett, but a quick trader who changes his mind from day to day, and gets in/out of stocks with a hair trigger. This means you simply cannot follow his stock picks, unless you are privy to his orders and sell just as he does.
 
Aerides said:
Jim Cramer is a carnival barker, and anyone who takes him seriously after 2008...I can't even. And that holds true for most any pundit, they are there for entertainment and viewer ratings, not accuracy.
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Can't argue with that! I never watch those people.



Roy
 
Back in those days when I had CNBC on cable, I liked to watch Melissa Francis whom I found pleasing to the eyes.

I only found out later that she was the little girl in the Little House on the Prairie TV series.


4d4b174ccadcbb2b78010000
 
The tv finance preachers are financial and psychology experts..... at getting suckers to part with their money. And getting rich in the process.
 
How to make 150 million? Start with 225 million.

"Investor Jim Cramer had a stake in the firm valued at $225 million during this time. As a result, Cramer lost a significant portion of his wealth when the dot-com bubble broke. Jim Cramer’s Net Worth is still $150 million."

https://traderlion.com/investors/jim-cramers-net-worth/
 
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