Dave Ramsey, a well-known radio host, recently got into a twitter war with fee-only financial advisers. The advisers had criticized the radio personality, who is also an author, for telling his readers to expect a 12% investment return and for promoting brokers who are commission-based. Ramsey hosts the popular “The Dave Ramsey Show,” which is a program about money and life.
One adviser, Carl Richards, Tweeted that Ramsey’s advice was “dangerous.” Ramsey responded to his critics also via Twitter, saying that he provides assistance to more people in minutes than all of these advisers ever will.
Another adviser, David Grant, questioned whether the investment professionals that Ramsey recommends on online pay the host for that endorsement. Ramsey did not respond. However, his website does state that local providers that are endorsed do pay a fee for the “local advertising.” All recommended providers, however, have to be Financial Industry Regulatory Authority Inc. members.
Commenting on the Twitter spat, Forbes contributor Tim Maurer said that beneath this social media disagreement is an even bigger problem, which is that the factions in the “financial kingdom” have incentive to work against each other, rather than together, which limits their “collective benefit.” Maurer was also quick to point out that this brawl only includes two of the factions that exist and they aren’t even the most powerful ones.
The financial planner and educator proceeded to offer his take on the industry’s most powerful, with banks, broker-dealers, and insurance companies among the most influential, followed by independent RIAs (Registered Investment Advisory firms). Then, there are FINRA, the SEC, the Certified Financial Planner Board, the Financial Planning Association, the National Association of Personal Financial Advisors, and the financial media.
Maurer talked about how what sells is differentiation, with little impetus to fine commonality. He did, however, suggest that there should some unifying principals that the public could depend on from these different factions if they would be willing.
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Dave Ramsey’s Online Brawl Shows Problematic Divisions In Finance World, Forbes, June 4, 2013
Dave Ramsey flames advisers on Twitter, Investment News, June 9, 2013
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