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Beware False Prophets in the Financial Industry
During your life there will be plenty of people who will offer you advice. Family, friends, co-workers and even people you hardly know.
Some of this advice may prove to be helpful; other times it will be absolute waffle and in some cases downright harmful.
To make progress in life you need to seek advice, words of wisdom, counsel or guidance from people with greater knowledge than you possess. Your formal education (school and university) operates on this very principle. It is simply not possible to be knowledgeable on every topic, so you seek out sources that possess the knowledge you wish to obtain.
The advice from your family, social and professional network should be weighed up against the value you place on that person’s opinion. How do they conduct their life — with honesty and integrity or are they a little bit loose with the truth? How have they achieved their professional success? What are their personal relationships like and what are their life experiences? (It always amazes me that a Catholic priest is called on to give marriage guidance!)
It is up to you to determine whether the advice you receive has merit or not.
The advice I am talking about so far is the free advice you will be offered. The free advice offered by your network of contacts can be very well meaning but erroneous (think of the father in the Telstra ad when he advised his son about ‘keeping the rabbits out of China’) and if you follow the advice it could have embarrassing consequences. This is where you have to have a good filter.
Beware free advice which can also prove to be very costly e.g. a friend saying, ‘You should invest with my mate Bernie Madoff.’
If the free advice sounds reasonable, undertake a more detailed independent investigation to ascertain the merits of the advice. The other type of advice is the stuff you pay for – legal, accounting, financial, medical, psychological, motivational, fitness, life coaching, business coaching etc.
However, paying for advice doesn’t necessarily mean it is sound advice. You must exercise cautious judgment as not everyone you seek a professional opinion from is competent.
Read the rest of this article at The Daily Reckoning
