New book condemns financial advising

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A book has been released in America which could severely damage the reputation of financial advisers if it takes off.

Journalist and financial columnist Helaine Olen has released her book Pound Foolish: Exposing the dark side of the personal finance industry, and has received extremes of praise and criticism.

The book is said to expose myths, contradictions and “outright lies” the finance industry has perpetuated.

Four such topics Olen dismissed were:

  • Cutting back on small pleasures such as coffee will make you rich
  • Disciplined Investing can turn modest savings into a huge nest egg
  • Women need extra help managing money, and;
  • Financial classes in school will prevent future economic crises

Advisers have lashed back, questioning Olen’s credentials and accusing the book of being a money-making scheme.

“Many of these entertainers, which is what I consider the talk show hosts to be, have never sat across the kitchen table with a husband and wife trying to decide how best to invest their money for: retirement, education, a home or understanding the basics about debt verses assets,” said one comment on the book.

However, praise has been just as prominent, with Reuters’ opinion editor James Ledbetter saying:

“The world of personal finance is an economic sideshow filled with illusionists, conjurers, and snake-oil salesmen of every stripe. Thankfully, Helaine Olen has spent enough time inside the circus to be able to guide us wisely and wittily through the hall of mirrors—and come out smarter on the other end.”

The book is selling for about $27 online.  Will you be buying a copy? Share your thoughts below.

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  • Mark on 4/01/2013 10:10:51 AM

    A "journalist & financial columnist" reporting the "facts" about the financial services industry - here's a classic example of the pot calling the kettle black. And to quote another time-honoured saying, "people in glass houses shouldn't throw stones". Here's one back at you Helaine - many people believe that journalists try to MAKE the news, rather than REPORT on it, because that's what sells.

    Every industry has its dark side, but it has to be put into perspective, i.e. what percentage of people are better off having received appropriate financial advice versus those that have been supposedly "ripped off".

    I'm loath to purchase the book as I really don't want to get embroiled in Olen's self-promotion, but if a copy ever appears across my desk, I'll certainly read it. I would like to know where Olen gets her research from and what percentage of people interviewed she bases her findings on.

    If it's merely Olen's opinions then, whilst I may not agree with them, she has a right to express them. However, if what she says is emotive, based on scant evidence, then she'll go into the looney basket along with the Mayan predictions.

  • Steve on 4/01/2013 10:37:42 AM

    “The world of personal finance is an economic sideshow filled with illusionists, conjurers, and snake-oil salesmen of every stripe. Thankfully, Helaine Olen has spent enough time inside the circus to be able to guide us wisely and wittily through the hall of mirrors—and come out smarter on the other end.” Well, Mr Ledbetter, your lot are pretty good at feeding off this industry, so your "opinion" is not realy worth taking seriously. And frankly if the "myths" Ms Olen has dismissed is the best she can come up with, the everyone should save themselves their $27 and have a few coffees instead.

  • Paul Ciuro on 4/01/2013 11:10:49 AM

    The "Helaine Olen"of this world have came and have gone but we will be still here looking after clients long after the "Helaine Olen" have gone and thier "book" is only good for a door stop.

  • Ronald Heron on 4/01/2013 11:25:50 AM

    Look at the facts. Calculate the outcome if one $5 cup of coffee be forgone for 260 work days a year, what is the balance after 20 years, assuming 7% p.a. return from shareholding investments. I remember an employee saying he would kill to have a car like mine. We then worked out the short time in which he could pay cash for my car if he cut out smoking. Saving and sane investing works better than waste. A planner can help with the education, strategy and encouragement.

  • Wayne Leggett on 4/01/2013 11:40:30 AM

    I haven't read the book, but if the rest of the book is of similar vein to the four myths quoted as examples, she should be commended for writing. Anyone making such foolish statements as those four deserve to be ridiculed.

  • Andrew on 4/01/2013 1:51:59 PM

    I just worked out with all the money Helaine will make from her book sales she will be able to buy a 1977 Datsun 120Y...!

  • WP on 4/01/2013 2:02:52 PM

    Sorry Mark, the mistake has been rectified. With the book being available worldwide do you think it could have an affect on Australian audiences?

  • Mark on 4/01/2013 3:39:17 PM

    Hi WP

    Given that we have such a different regime here, I don't think so. The Australian Financial Services Industry is one of the most heavily regulated industries in the world; just have a look at how much consumer protection there is!

    As qualified, professional advisers we need to point out these differences to people.

    There will always be sharks, no matter what industry you're in. FOFA will certainly "close the gates to the tuna pen" for many of them, but there will always be the minority who try to rort the system for their personal advantage.

    And as far as Olen is concerned, her credibility took a nose-dive when I read that she wrote a book on how to successfully date people in your working environment . . . . "Never dip your pen in company ink" is what I say!!!

  • Gordon Black on 15/01/2013 3:42:00 PM

    There is quite a good review of this book in this week's Economist. It is clear that she is attacking those who purport to be advisers but who actually flog product for high commissions. Of course we don't have any of those here.

  • Mr Alesi on 4/01/2013 12:35:35 PM

    'Opinion of *broke* editor James Ledbetter reporting on Helaine Olen's *fear porn*'

    Bets on Today Tonight picking up this story, prime time tripe for the masses, it's evolution baby.

  • Leo on 4/01/2013 12:45:06 PM

    in any industry you will have genuine people and con men. especially when money is involved. It seems the book implies that all finacial planners are conmen. We could use the same yardstick to journalists, politicians,accountants,lawyers, any profession really. Is that really the world we live in?

  • Mark on 4/01/2013 1:32:14 PM

    Having just completed some "web surfing" during a lunch break, I found out that there was one really, really important point you forgot to mention in your article about Helaine Olsen . . . .

    Pound foolish is about the AMERICAN financial services industry.

    Furthermore, Olen seems to be attacking not financial planners, but the so-called financial gurus; probably not one qualified financial planner amongst them!

    I'll leave it up to the rest of the readers of this column to work out the differences between the US and Australian financial services industry.

  • Informed investor on 4/01/2013 12:30:12 PM

    the four myths visited
    1. no credentialled adviser would say that
    2 define huge $10,000 is huge for some, any saving strategy has merit
    3 women, like anyone who hasnt had any financial experience, need more time, bad generalisation by Helen
    4 education helps make people more informed so teaching the basics would also help, any value in Helen's book, no, it is only her vain attempt to earn money, her own savings plan at the expense of others on the whole provide appropriate meaningful support to clients to enhnace their financial security , like in any box there will always be good and bad, Helen sits where?, lost in the middle

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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