Financial Advice 2: How to Find Good Advice

in #steemleo2 years ago

What is Good Financial Advice?

There is a sea of information out there and it's easy to get lost. This post will focus on what is good advice, how to find it and what to avoid. Financial advice always starts with discovery, you have to know what you want and your adviser needs to understand what your goals are, or the advice will be meaningless. You should have a goal in mind if you want to reach it. A good financial adviser will always start a relationship by asking you a lot of questions if you want great custom-tailored advice, be prepared to give up information.

There are a few types of people who can provide you with financial advice. If you need accounting advice, seek an accountant. If you need insurance, start with an insurance professional and if you require legal advice, definitely don't expect your investment advisor to help you out! Be specific, if you want to plan, meet a financial planner if you want to plan for your retirement seek a financial planner who specializes in retirement planning. Once you know what type of advice you require, the next step is to find someone qualified who can provide it.

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Yes, you want a qualified adviser. We have read articles on Steem trying to sell investments and they have zero qualifications; some people even think that accreditations are unnecessary. Not only is it unethical to provide investment advice without proper qualifications, but it is often illegal. Professionals have a license, they pay membership fees, they have a regulatory body and they can be sued for providing bad advice. Someone without accreditation has very little to lose. Not all qualifications are equal and some are specific so be careful; acronyms next to a name matter, but make sure they are relevant!

How Much Does it Cost?


Financial Advisers have to be upfront about the fees and commissions they charge, this is a whole topic upon itself. The cost of good advice varies from essentially free to hundreds or even thousands of dollars an hour. Great advice isn't necessarily expensive like a good lawyer and many banks often provide 'free' advice to their best clientele. The whole do it yourself, DIY movement is trying to take advantage of free advice out there but a couple of poor decisions or missed opportunities could cost you a bundle in the long-run. A good financial adviser is like a coach, they help you stay on track and focused. I've met many poor people without financial advisers but I yet to meet a wealthy person who has never received financial advice.

It's All About Trust


An adviser has a fiduciary duty to their client(s), they have to act in their clients best interests. The client should be above the advisers own self-interest and their firm's. Regulatory bodies try their best to ensure that advisers are not cheating their client's and that they are not pulling any investment scams. The internet and Steem are unregulated so you should not trust anything you read here-there are scams being pulled every day. Don't trust a random internet stranger, I shouldn't even have to say this but if you don't know who your advisor is and where they work, then you're a fool giving them your money. If someone is new to their job and they have no verifiable references then you shouldn't trust them. Keep in mind, advisors should never disclose who their clients are, confidentiality is important but the advisor must disclose who they are.

Red Flags

  • Avoid anyone who promises outrageous returns. I have read posts here saying invest in this you can earn over 300% per year! People are even talking about how you can purchase various tokens and beat Warren Buffet (21% APR for half a century.) It's ridiculous to think that you can find an advisor or an investment that claims to beat the most successful investor in history.
  • Don't give your money, Steem or time to someone who is anonymous. If someone doesn't give you their name, their firm's name or at the very least their verified linked-in profile, don't give them a penny. I don't want to hear that this is a blockchain and is trustless, that is nonsense.
  • Look for disclosures. If there are no disclosures a law is probably being broken somewhere. If someone is selling you something they should disclose if they own it and if they are earning any commission. Somethings cannot be legally sold to ordinary American citizens- if a coin/token/ICO/investment scheme ignores this fact they have disdain for the law and should be avoided.

Great Advice isn't Easy to Come By


Start looking for good advice in your community or at the very least your jurisdiction. Seeking cross-border advice is challenging as advisers often only understand local rules. Ask your friends, colleagues, and family if they can recommend anyone. Most importantly when you find a good adviser you should listen to their advice!

Thank you for reading, I hope you found some valuable information. Please feel free to ask any questions.

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Steem Blockchain allows for delegated stake. This means I can lend you money without risking the principle as I can cancelled the delegation and get it all back.
I even get to keep the meagre interest earned from the staked Steem
However, I could lose all the promised reward.
It's sort of difficult to explain to nocoiners but a get part of blockchain technology.

Unfortunately PAL and LEO aren't taking Steem Power for delegations and offering PAL or LEO in return as I would be all for that.

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