Why Traditional Financial Advice Isn't Working

Have you ever wondered why so many investors are glued to the financial news channels and websites in a desperate search for information that might help them put their financial house in order ? In my opinion, it’s primarily because traditional financial advice has failed them ...it simply isn’t working.Chasing the hot stocks and investment products of the moment has enriched brokers, bankers, insurance salespeople, and, yes, the financial media- at the direct expense of those they pretend to serve. There has to be a better way.

Shiny Objects

Investments and all the stuff that surround them appeal to our emotional senses. We want to make more money, beat the market, and spend some of the gains on a sexy new red sports car. Right? Oh, so wrong!The lure of the “shiny objects” of investing can easily push even the most well-intentioned investor far off course. But, it’s just these “shiny objects” that big brokerage firm financial advisors peddle as they drone on endlessly about all the stock analysts and experts they employ.It is indeed these same “shiny objects” that the indexed annuity salesman pushes through the free steak dinner seminars. Yes, the same “shiny objects” that wealth managers at the big banks foist upon unsuspecting investors hoping to be wrapped up in the security of dealing with a large bank. Each of these are routine examples of failed financial advice that take place thousands of times every day.

Big Brokers and Big Marketers

To be plain, the traditional investment firms, (you know the ones mostly with two names like Merrill Lynch, Edward Jones, Morgan Stanley) aren’t advisory firms at all...they are marketing firms. Procter and Gamble markets Febreeze and Swiffer (along with dozens of other consumer products) by appealing to emotions; Wall Street firms market expensive, complicated investment products in exactly the same way.It’s true that some of the issues with bad investing advice can be traced to where many investors seek advice in the first place. For physicians, the doctor’s lounge may be a good place to visit with colleagues, but a very poor place to seek financial advice. The same holds true of those you know from church. Of course, TV is the worst of all since the media deals only in the moment.For all the adrenalin that courses through your veins when you win the short-term financial sprint, what actually matters is winning the long-term marathon as you strive to build a personal financial structure that can support your lifestyle for decades into the future. Traditional financial advice purveyors simply aren’t set up for that. At their core, they are transactional businesses, not long-term relationship businesses.Related: Are You Ready to Approach the Race for Your Future Financial Life?

Find Advice Here…

So, if traditional financial advice isn’t working, what are investors to do?Simply put, seek advice where actual advice is rendered. Don’t look for financial advice in the heavily conflicted traditional brokerage firms. Don’t seek advice from the banks with the financial product salesman sitting in the lobby. Also, don’t expect holistic financial advice from insurance salesman wearing the tag “wealth advisor,” knowing full well that they are compensated mostly by selling insurance.No, look for advice from firms that deliver financial planning advicewithout selling anything but advice.To paraphrase the Gospel of John, “Whom do you seek?” What do you want to accomplish financially? Why does this matter? Your overall financial wellness today and how well prepared you are for tomorrow depend largely on how you answer these questions. Start there. Ready for a real conversation?