6 People You Should Never Take Money Advice From
Written by
Angela Mae
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
In an era where anyone can be anything, it can be hard to find the actual experts — and the people with your best interests in mind.
If you’re seeking money advice, it’s important to be careful and choose your inner counsel wisely. Otherwise, you might end up getting advice from people who are well-meaning but don’t actually know what they’re talking about. In some cases, you could get advice from people who have an agenda of their own.
Whatever the case, if you’re looking for money advice, here are the top people you shouldn’t listen to.
Family
Many people turn to their family members first for advice, whether it’s financial or otherwise. But even if your family means well, they might not always be the most qualified people to give that advice.
“Family may have your best interests in mind, know you well, and want you to build wealth like no other. But that doesn’t mean your parents or grandparents or that ‘uncle in finance’ knows your full picture, knows the new ways to grow wealth, or isn’t set in their ways based on how they did it,” said Crissi Cole, founder and CEO at Penny Finance.
Friends
Of course, not everyone turns to family members for money advice. But friends are a definite close second.
“Talking about money plans with friends can be cool, but their ideas won’t always match your goals,” said Michael McAlpin, CEO, CCO and wealth advisor at Intellicapital Advisors LLC. “They might even get you hyped about risky get-rich-quick stuff that’s not smart.”
Like family members, your friends don’t always know what’s best. If your friends don’t know your whole financial situation or aren’t well-educated in the field, you can’t be sure they’re giving good advice.
Anyone Else Who’s Biased
“You should never take financial advice from someone who has a biased view,” Cole said.
This is just as true of professionals as it is of loved ones.
“Just because someone is an expert or a certified financial advisor doesn’t mean that they are looking out for your best interest,” Cole continued. “What are they gaining for telling you to buy a certain mutual fund? What are they gaining by telling you that you really need a life insurance policy? Are they getting paid on the back end of that?”
While you can still take advice from professionals, it’s best to educate yourself so that you can make decisions that truly work for you.
“Take input from everyone and anyone, but you are the only person that can make the best decision for your financial future by putting all the pieces together,” Cole said. “Finances are not black and white, there is no right versus wrong. It is all about what you prioritize in your life.”
Salespeople
Salespeople, especially life insurance people pretending to be financial planners, should also be avoided when it comes to financial advice.
“There is an entire industry of individuals who specialize in life insurance and use financial planning to create high commission life insurance sales,” said Robert Clements, ChFC®, AIF® and partner at FRS Advisors. “Life insurance is a critical piece of a financial plan, but it is important to understand the role of insurance in your family’s plan, the types of insurance and the pros and cons of the various types of insurance.”
Salespeople like these have their own agendas. Even the best ones are looking at their bottom line.
“I have seen firsthand insurance salespeople build a plan that will encourage people to use life insurance as their primary savings tool without presenting all of the options that are available to the client that may be a better fit for them, simply because the larger premium has a very high commission to the salesperson,” Clements added.
Avoid anyone else trying to sell you things, too.
“Fancy brochures and promises sound cool, but sometimes those people want to sell something to earn a commission, not help you get ahead,” McAlpin said.
Social Media Gurus
If you’ve been on social media, you’ve probably come across self-proclaimed experts offering financial advice. Unfortunately, many of these individuals are either not experts or are promoting the latest trends — without necessarily knowing if they’re right or good for their audience.
“Everyone’s got an opinion online. But random trends and memes (remember GameStop?) aren’t a good way to make smart money decisions,” McAlpin said.
Generalists
Avoid taking money advice from those who only give generic advice, whether they’re professional financial advisors or otherwise. These individuals aren’t giving you tailored advice that works with your specific circumstances, so you can’t be sure that it’ll be in your best interests to follow it.
Marty Burbank, an estate planning expert at OC Elder Law, gave an example to highlight the importance of tailored advice.
“In the realm of veterans’ benefits — a key area of our practice — we’ve seen clients potentially misled by generic financial advisors who are unfamiliar with the specific entitlements and application processes for veterans,” he said. “These benefits, including the Aid and Attendance benefit, can offer substantial support, but only if approached correctly. Misinformation or incomplete advice can lead to rejected applications or missed opportunities.”
Steer clear of generalized advice, especially if you have a more complex financial or legal situation.
Take Advice From Qualified Professionals
“You should only take financial advice from professionals,” said Melissa Murphy Pavone, CFP, CDFA and director of investments at Oppenheimer & Co. Inc. This includes certified financial planners (CFPs) and certified public accountants (CPAs).
“When advising a client on finances, I stress the importance of assembling a team of professionals to help navigate the complexities of the process successfully,” Pavone continued. That way, you’ll have a comprehensive and coordinated approach to your finances and long-term success.
And if you don’t want an entire team, choose someone who’s truly an expert if you’re seeking advice.
“Get money advice from someone who is paid to be your expert, not to sell you something. These pros are called wealth advisors — think of them as money doctors for your future,” McAlpin said.
More From GOBankingRates
