Regular and careful readers will recognize that I have quoted Barry Ritholtz before. And they also might notice that he is … technically … my competition in one of the same businesses I am in. So be it. In the referenced column, Barry is spot on.
“Note I am not going to tell you to “buy this, sell that.” I can’t for the simple reason I have no idea who you are, what your financial goals are, what taxes you owe, what you earn, how much you have saved and how old you are. (Ed. Note: Unless we’ve gone through a discovery process.) Without knowing those factors (and other relevant information), how can anyone tell you what is right for you?” …“I offer you none of that: no stock picks, no predictions, no economic analysis.”
Pardon my abrupt transition. At this point in this article, I would have liked to have linked or referenced to some other things I wrote … but … these things are only in the draft stage …not yet published.
Very broadly speaking, these future topics have to do with finding someone who will work only in your best interests (the Fiduciary Standard.)
In a bit more detail, these topics have to do with “Buyer Beware.” In the United States, there are approximately 637,000 "brokers" (also known as "Registered Representatives" ... people who have some kind of securities license. [ https://www.finra.org/newsroom/statistics ]. There are also approximately 1.2 million licensed life insurance agents ... (typically the licenses needed to also sell fixed annuities and life insurance.)
Also apparently according to the above site, about 50% of those 1.2 million are active.
So, doing the arithmetic, there are plus or minus about 1,200,000 people who get compensated in some fashion … directly or indirectly … from doing some kind of financial services business with the American public.
In a (hoped for) future “Buyer Beware” article, I will go into more detail about the “flavors” of these financial folks … not in this article.
In addition to the ~1,200,000 people mentioned above, there are also financial writers and pundits of various kinds. I separate these people specifically because some of these people are paid in other ways … i.e. not directly or indirectly by the public. (e.g. financial publications, financial broadcasters, economic and / or financial research, etc. etc.)
There are clearly people who do both. Barry Ritholtz, whom I mentioned above, writes a column for The Washington Post (linked below) … and he operates a Financial Services business.
But the “pure” financial writers who are not doing business with the public are not subject to the same financial regulations that those of us who are doing business with the public must live with … (e.g. … licensing, disclosure, guidelines for communication with the public … to name a few.)
So, ultimately, Barry makes a critical point in his year-end article. If you are taking your financial advice from someone who doesn’t know your situation and is also not regulated by agencies tasked with protecting the public, beware and consider the sources.