Is Your Financial Advisor a Yes Man

Recently, I posted an article from CNN Money to our Twitter account (@investsafely) regarding investment advisors, titled “Do you have a yes-man problem when it comes to financial advice?”

To summarize, the article covered a study on investment advisor bias. Actors went to advisors with fake investment portfolios. Long story short, the advice was largely based on the current holdings of the “client”.

In other words, instead of looking at each person’s goals and objectives, advisors looked at the current investments and recommended more of the same.

One follower asked the question: “So what is the solution?”

Realistically, it will take some time on your part to figure this out. I know, I know…I can hear all the groaning already!

Seriously though, you need to find an advisor that is willing to push you; one that takes time to review your goals with you up front, before trying to figure out what investments you need.

Your adviser should push you as to why your goals are so important; not because they are not important. Instead, you want someone who can assist you in making sure that the goals are really in alignment with what you want and will help you get it! Reviewing your portfolio and making recommendations should only occur afterward.

Above all, any advice needs to make sense to you! Even the information listed on this site is up for discussion. At the end of the day, you’re the one that will be left holding the bag, so to speak. Hopefully, it will be full of a lot of money, and not something less pleasant.


Financial advice: The yes-man problem
Stephen Gandel – CNN Money – March 11, 2010

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