My Confession: Have I Offered Solutions?

You may be getting sick of my ranting and raving; of my complaining about what the financial advisory industry looks like; and of the lack of value being delivered by financial advisors to you. You may wonder why I bring all this up, but never offer any solutions to the problems. The answer is simple: I do not have any solutions. I do not know what needs to happen in order to truly help you with your financial well-being. I do not know how to get the focus away from chasing overnight wealth and materialism.

This industry is simply chasing the money. What is being offered is what you are willing to pay for. You don't need expensive investment advice; but this is what you continue to ask for, so the industry delivers. You don't need someone to predict the future, but we continue to try (and mostly fail) because this is what you are demanding. The industry has no incentive to change.

I confess, I am frustrated and don't know how this industry and profession move forward. On my other blog, I am putting together a business plan for what my ideal financial planning practice would look like. I am not moving forward very quickly. I sit down to write the business plan, but get nowhere. I have an idea about what I would like to deliver, but have a belief that you won't pay for it. You want investment advice and predicting the future, not help with using your money to reach your goals and understanding the impact money has in your life. I can't deliver what you want, and you don't want what I can deliver and what you really need.

There is so much more that the financial advisory industry and  the financial planning profession can provide you. But for the most part you don't want it and we don't deliver yet. How does this change? I don't have any answers, only questions.

Do you have the answer?


Aaron @ Clarifinancial said...

I thought of something yesterday as I was deleting the tons of product marketing emails I get every day. Why can't we create an etf or low-cost mutual fund that works the same as an "equity index annuity" (without the surrender charges and probably better caps etc.)?

I know it's not a popular way to invest and advisors like to say, 'well according to this model, if we do this instead, we should average better returns X% of the time.' But many individual investors - real people - don't seem to care. Many are afraid of loosing money they worked hard to build up, but might still like it to go up. And a multiple choice test doesn't accurately reflect real-world psychology and risk tolerance because life doesn't happen as a series of four rational choices. If that was the case, choose-your-own-adventure books would have been enough.

Maybe this is a small part of the solution. Mini-rant over.

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