A post entitled, Three Ways Personal Financial Advisors Mislead You,” is getting big play in search engines today. Ramit Sethi, author of The New York Times bestseller, “I Will Teach You To Be Rich,
” attacks advisors for telling people to keep a budget, charging more than .5% to advise on 401(k) assets, and telling people to manage payroll deductions to avoid getting a tax refund. Should you let him get away with it?
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Sethi’s judgments are severe and wrongheaded. But the reality is that Sethi has influence. Sethi, who says
he earned undergraduate and master’s degrees in technology and psychology at Stanford University, posted to Yahoo’s! small business advisor blog
. Since Tuesday night, the post has been recommended by more than 300 people on Facebook, and it’s been tweeted about 60 times. Sethi has 45,000 followers on Twitter.
Sethi, who probably does have some good suggestions about how to succeed in life, is great at self-promotion and will vilify advisors if it is convenient. While 10 years ago, it was just the consumer press that sought to empower investors by blasting an entire professoin, folk heroes like Sethi are springing up in social media. You can chose to ignore them but they will not go away and they are influencing people. More than 925 comments have been posted to his post blasting advisors.
Advisors should make an effort to respond to demagogues like Sethi who capitalize on attacking all financial advisors as crooks and cheats and who don’t know or don’t acknowledge the good work that a professional advisor can do for people. Posting a comment on his blog post and linking it back to good financial advice that you offer on your website or blog would be good iand good for you and let you set the record straight.