How To Identify Bad Financial Advice

ByMichelle Garrett

Welcome! This article on how to identify bad financial advice is part of our Financial Literacy Month Series. Click here to read other articles in this series. 

Ever had someone give you well-meaning advice that caused you to pause and think twice…maybe three times???

There are people in our lives that truly mean well but are absolutely financially clueless.

I had a conversation with some girlfriends this weekend that made me really stop and think of some of the advice I’d received and given. This led me to think about when financial advice goes bad … and the repercussions when it’s taken.

Signs you’re a victim of “when financial advice goes bad”

  • Consider your source and their intentions – what’s their current financial status; will they benefit from their advice directly or indirectly; would they take the advice they are offering up? All of these and more questions to ponder when 
  • If your gut reaction is “HUH?!?” then you probably want to think again
  • The returns and/or savings seem way too much for a little bit of investment or work on your parth
  • The advice includes absolute terms (always, never, etc). What’s right for me may not necessarily be right for you – it can vary based on our personal situations and long-term goals.

When financial advice goes bad

A Good Financial Advisor should be:

  • knowledgeable about different financial options, situations and 
  • trustworthy – they’re dealing with your money, your livelihood and your future. Need I say more?
  • experienced with a successful performance background
  • accessible to respond to your questions and concerns
  • passionate about their work and making your money work for you
  • willing to share their knowledge with others to help financially empower others

 

Sharing time Divas!
Have you been a victim of “when financial advice goes bad”?
What’s the worst financial advice you’ve ever received?

I’ll go first – I had a friend tell me that saving for a raining day was pointless because you could always buy an umbrella and charge it to your credit card. So thankful I didn’t listen to that one!