Do you struggle with knowing where to find reliable financial advice? You are not alone, according to TIAA-CREF’s second annual Financial Advice Survey. In fact, 48% of Americans struggle with the same thing.
A leader in the financial services industry, TIAA-CREF employed an independent firm to survey 1,000 random American adults about their attitudes, behaviors, and preferences when it comes to financial advice.
Breaking Down the Numbers
How do you stack up next to other Americans who were polled?
- Do you dislike talking about your finances? You’re not alone. Thirty-seven percent of Americans feel the same way.
- Do you think you need a financial advisor now more than ever before? So do 46% of your fellow Americans.
- Do you, like 2/5 of the population, think you don’t have enough money for good financial advice?
- Do you also, like 1/3 of the population, think you don’t have enough hours in the day or week to get good financial advice?
- Do you prefer multiple points of contact for financial advice, or are you like 58% of the population who prefers a centralized location for advice?
Beyond the general population, the study also revealed where various subgroups are getting their advice. Gen X’ers primarily trust financial websites and online resources, while Gen Y’ers are more likely to seek out friends and family for wisdom.
And lest you think it’s just an age thing, the survey also revealed that, in general, women too are more likely to reach out to friends and family, while more men go online.
Where Do I Turn?
So this begs the question: With so many avenues at our fingertips, how does one go about determining what is reliable financial advice?
We decided to ask some blogging friends what they recommend. After all, they’re writers who regularly share financial wisdom. So how do they think people should determine what sources they can trust for reliable financial advice?
Clark Howard from ClarkHoward.com: “The first place you turn for trust is not to the web, it is in the mirror. You need to be the captain of your own financial ship. Anything you use is just a tool to help you with that. But don’t give up control based on what you see on a website. If you are looking for places to start though, Investopedia, Vanguard, and Schwab make a lot of great investing information available for free.”
Todd Tresidder from Financial Mentor: “Judge by results – often harsh, always fair. For example, many financial gurus have a checkered past of bankruptcy and legal problems. It’s the financial equivalent of trusting your car to an auto wrecker. Also, find authoritative, credible sources that are providing high value education and look closely at how that person makes money to understand the conflicts of interest inherent in his advice. For example, if your variable annuity salesman’s primary source of income is variable annuity sales then you can’t trust his variable annuity recommendation.”
Lance Cothern from Money Manifesto: “Professional qualifications show that the writer took the time to learn the material. Be careful though, just because I have my CPA doesn’t mean that I keep up to day with all of the newest tax laws. After all, I’m not a practicing tax return preparer. If you’re not certain of a source’s advice, try to verify it with another source first.”
Glen Craig from Free from Broke: “I think you have to look at the advice and ask yourself if it makes sense and is worth following? Not all ‘expert’ advice works for all situations.”
John Schmoll from Frugal Rules: “I think you need to take a look at a combination of their experience (both personal and possibly professional) as well as if what they’re saying seems like common sense. Assuming they have a combination of the two, then it’s likely you can pull something out of it.”
Jeff Rose from Good Financial Cents: “I have greater trust for those that have walked the walk and can speak to that. Someone like Pete from Mr. Money Mustache who has tested Lending Club and walks you through the entire process holds as much credibility to me as a CFP on the same subject. <gasp> Did I just say that? Haha…”
Teresa Mears from Miami on the Cheap: “[You should look for] Experience, qualifications, other writing. Whether the writer has a financial interest in the product.”
Joel Wenger from Invest Safely: “Trust, but verify! I think people looking for advice need to spend some time applying the source material to their specific circumstances. If it doesn’t make sense or is too complicated to understand, ‘trust’ hasn’t been earned. If someone can take a complex subject and make it simple to understand, that usually indicates a high level of mastery.”
Rebecca Stapler from Stapler Confessions: “It’s important to get financial advice from someone who is qualified and has a fiduciary duty to provide advice that is in your best interest. That is not to say that advisers who earn commission from selling a particular product are not to be trusted, rather you should be skeptical of their advice and do your own independent research before committing to that product.”
Doug Nordman from Military Guide: “I’d want to know how the advisor profits from their financial advice. Fiduciary is essential but free or non-profit might be just as good.”
Note from PT: “My take… There is no ultimate source for the perfect financial advice. I’ve learned that it’s got to come from a variety of sources and personal experiences. AND one source is not particularly more trustworthy than the next. But I do tend to gravitate towards sources with designation (CPA, CFP, etc.) on higher level topics, like investing and taxes. These folks have proven a baseline knowledge/competency and they have something to lose. Ultimately though, you’d be best served in life if you become your own best trusted source.”
What criteria do you use to determine if the information you’re getting is good financial advice?
Image by Tulane Public Relations