Who Do You Listen To?
It’s noisy out there!
When it comes to finding high-quality, appropriate advice on financial matters, it can be difficult to discern between solid information and wishful thinking…not to mention deciding if what works for someone else, will work for you.
Financial Advice From The Media
First, and probably foremost, we are bombarded with financial advice in the media. Those feel-good buzzwords — the ones that wealthy people and industry professionals never say — like abundance and prosperity, flash across our screens, tempting us to spend money to make money. Every day, ten more money-mindset miracle workers launch online coaching classes with big price tags but no credentials. Be wary of feel-good jargon in pretty packaging.
The nightly news can be riddled with financial fear stories, exaggerating moves in the markets, or filling our ears with one-size-fits-all sound bites like “buy REITs,” “RRSPs are bad” or “TFSAs are good.” Fear sells, but facts keep us on track. Markets are cyclical. They will fall just as surely as they will rise. And those sound bites are certainly not useful because we don’t all have the same needs financially. We need to know where we are and where we want to go before we can begin to know if a Tax-Free Savings Account is a better vehicle for our financial journey than a Registered Retirement Savings Account.
“Your financial plan must be tailored to you, not the news.”
When assessing financial advice and information from the media consider the breadth of knowledge behind the source. How much research has been done by the information provider? Consider the tone of the article, advertisement, or show. Is it inflammatory? Is it rife with feel-good words meant to intoxicate? Look at the advice itself. Is it a single-solution approach where this one thing will answer all of your financial needs, regardless? Solid financial advice must be based on factual information and should be delivered without emotionally triggering pretexts.
Financial Advice From Friends and Family
We also get financial advice from friends and family, and it’s usually unsolicited, well-meaning, and not very useful. Maybe Uncle Bob made his tidy nest egg by scooping up stock from the Acme widget company in 1967 and he tells you it’s a no-brainer. Maybe your neighbor heard a hot tip about a sure thing. Maybe that guy at the bar insists the future is Bitcoin and Tesla. Chances are the widget company is past its prime, the sure thing is not so sure, and what’s trending is not necessarily the best investment for you and your needs. Context is important here.
“Though all of these strategies may be perfect for the person giving the advice, they may not be right for you, for now, and for where you are on the financial continuum.”
Finding a Financial Professional
Let’s say you’re looking for financial advice and you’ve decided that you don’t want to pay the abundance coach, you’ve tuned out the fear mongers on the news, you’ve passed over the widget stock, and you’re ready to talk to a financial professional. But who? There are so many options: accountants, mutual fund specialists, financial planners, brokers, insolvency trustees… the list goes on and on.
First, look at the designation, signified by a series of letters after the name, like CFP for certified financial planner, or CPA for certified professional accountant. Next, ask questions. What does the designation mean? Who regulates them? With this information, you can quickly search online for details on the professionals you’re considering. And finally, how do they charge for their services? If they can’t articulate their fee in a simple, straightforward manner, be wary.
Once you’ve found the right fit, and you feel comfortable working through your money strategy with sound advice to guide you, the noise will fade, and you’ll be on your way with a solid, fact-based financial plan.
Listen to Wise Money Moves Podcast, Episode 6, to hear Tracy and Kamal talk about information sources and who to listen to.
