Conflating and Misremembering
February 13, 2015It’s been hard to not pay attention to what is going on in the news business lately.Jon Stewart is leaving the Daily Show. Brian Williams has stopped reporting the news and has become the news.
In his apologies, he has used terms that we don’t hear very often: conflating and misremembering. I actually had to look up the definition of conflating. “Conflating – transitive verb 1 a: to bring together: fuse b: confuse 2: to combine (as two readings of a text) into a composite whole.” Williams took experiences that happened to others, added a bit of dramatic flair and attributed those stories to his own life.
With each day, new conflations and misrememberances are coming to light. He is now on a long leave of absence that I have a hunch will become a retirement or a “leaving to pursue other opportunities” at some point before he returns to the airwaves. In the news business, credibility matters. His is lost.
In the same way, the financial planning/financial advisory business is all about credibility. The Bernie Madoff scandal, like similar scandals before and the ones that will surely follow, gave the entire financial business a black eye. That’s a shame because there are an enormous number of excellent financial advisors/financial planners out there and they provide a much needed service to their clients. But… so many people that I have the opportunity to meet have a lot of doubt about how they can trust someone and how to find someone who won’t “go Bernie Madoff” on them. The U.S. Government actually has a stop fraud office that helps consumers prevent, detect and recover from financial fraud.
While there are absolutely no guarantees in life, you can minimize the risks greatly by asking the right questions and doing a bit of investigative work. The key factors are the advisor/planner’s education, experience, fee structure and reputation along with many other factors. The homework that you can do comes in many forms, and using these sites to dig into the background of your advisor can prove quite useful:
This article can also give you a head start on how to choose a financial planner. It gives you a number of questions to ask a prospective advisor.
One that isn’t in there that I always like to ask is “How do you stay current with your knowledge?” There are a lot of changes in tax laws, planning strategies and economic conditions and staying on top of all of that can be a monumental task. Asking that question allows you to see a glimpse of how that advisor does that. If the answer to that question is evasive, you have a clue that they may not take your money as seriously as you do. If they have a well thought out answer that talks about multiple channels and continuous re-education, then you have a clue that you’re working with someone who appears to be highly professional.
The good news in all of this is that unscrupulous financial advisors are rare. It’s tougher to find one of them than it is to find a highly qualified professional. With a minimum amount of effort, the right questions and trusting your gut instinct, you should be able to find an advisor with a lot more credibility than we have gotten from our NBC News anchor lately.