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STANDUP Advice: I am not a Guru

John J. De Goey, CFP
0 Comments|July 27, 2007

Can't we all just listen to one another?
Can't we all just listen to one another?

Recently, an online clipping service that I subscribe to offered a teaser headline announcing to one and all that the service had secured the talents of a "guru" in the field of alternative investments. I cringed. Not at the person, who I believe to be highly reputable, but at the way his new column was being positioned. To my mind, there are very few "gurus" in the world.

My primary claim to fame is that I have written a book about the sometimes painful, but always necessary things that need to transpire before the business of giving financial advice can be considered a true profession. The book is generic and conceptual and that's deliberate. I want people to focus on "big picture" problems and circumstances. Part of that involves showing where some of the "gurus" of the past went wrong.

Those past missteps are something that I feel we all need to come to terms with. The financial services industry has taken an "if it ain't broke, don't fix it" attitude to how things work. As such, I felt I had no real alternative but to point out those things that were, in my humble opinion, clearly broken. To my mind, the only way anyone will consider a new paradigm is if there is a consensus that the old paradigm is somehow flawed.

It can be pretty lonely pointing out flaws and misperceptions when the whole world is perfectly content in the belief that they've "got things figured out already." In the past, I have suggested that I'm a little like the kid in the back of the parade in the fairy tale "The Emperor's New Clothes," since the things I'm pointing out, while obvious to those who care to look at the information dispassionately, risk having me portrayed as a "glass is half empty" kind of guy. So be it. For the record, however, I do not point out previous errors in any attempt to knock down other personalities from their previous perches; I point them out so that we might all come to learn from our past mistakes and devise better ways of doing things going forward.

My own, very personal view is that the current level of discussion about what needs to change in order for that to happen is being clouded by a number of presumptions that are simply wrong. There is a consensus presumption that active management (i.e. "stock picking") adds value, but there is virtually no reliable evidence to support that presumption. There are suggestions by many that financial advice is "free," even though that is clearly not the case. There is a presumption that financial advisors do not add value otherwise, even though by doing other seemingly mundane things, evidence seems to suggest that they actually do add value. I have additional concerns regarding bias (both real and perceived), professional standards, fiduciary obligations and so forth.

In order for the rendering of financial advice to become a true profession, we'll have to unlearn much of what we've learned in order to more properly learn how things actually work. There's just no gentle way to tell the world that you fundamentally and profoundly disagree with many of the tenets that others simply take for granted. I have a minority perspective, but I always take care to substantiate why I feel the way I do. If only the consensus view would be so balanced in its portrayal of how things work. Was Rosa Parks using a glass is half empty perspective when she chose not to give up her seat at the middle of the bus half a century ago or was she merely struggling to STANDUP for her principles? Just because there is a disagreement about prevailing paradigms doesn't mean that a purposeful debate about next steps is out of the question. I believe the debate could be (and should be) highly instructive, entirely civil and rather useful- if only we could have it. Too often in the past, I have watched as senior industry players have refused to be dispassionate in how they portray information because the status quo (often in the form of non-disclosure regarding countervailing evidence) suits them very well.

I am not a Guru. I simply want advisors and consumers to have a full and frank discussion surrounding what financial advice giving is and what it hopes to become. I have a modest role in facilitating an honest debate on a number of subjects, but I do not claim to have all -- or even most of -- the answers. All I know is that we'll never make any progress without having a meaningful discussion about how to constructively move forward.

John J. De Goey, CFP is a Senior Financial Advisor with Burgeonvest Securities Limited (BSL) and author of The Professional Financial Advisor II. The views expressed are not necessarily shared by BSL.

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