Financially Speaking Podcast

Financial Somebody

Published on June 9, 2014

In recent weeks, I have spent several hours of drive time traveling to conferences in Dallas and Nashville.  I passed my time listening to Sirius radio, which has more stations than any human needs.  On two or three different stations, I heard an advertisement for “the nation’s best financial advisory firm.”  The ad was encouraging you to call them about your IRA; and how their advice would help you get stock market returns without the risk.  Their clients never lose money, they say.

As I listened to the ad over and over again, I determined that the “advisory firm” was really an insurance agent selling index annuities.  However, the average listener doesn’t have enough knowledge to parse the words to understand what was going on.  To the average listener, this guy was the best financial advisor in the country and he had the best financial product for you.  Never mind that he make huge commissions and wins trips to foreign destinations paid for by the insurance companies he sells for.

Long gone are the days when a stock broker was called a stock broker, an insurance agent was an agent and a banker was a banker.  Now they are your financial “somebody:”  advisor, planner or consultant.  Although stock brokers, insurance agents and bankers are heavily regulated by various federal and state agencies, there is no financial planning regulator.  So even your plumber can call himself a financial advisor, planner or consultant.  Everybody can be a financial “somebody.”

The reality is that some financial advisors really provide objective, knowledgeable, skilled advice to their clients; and that clients have to work hard to make sure that their financial advisor is not a financial “somebody.”


Tags: financial advisor; stock broker, insurance agent

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