FA Criticizes Tony Robbins’ Advice to Investors
Motivational speaker Tony Robbins may be turning investors away from advisors who act in their clients’ best interests, financial advisor Douglas Boneparth writes in a letter to the Observer.
Without any previous training as a financial advisor, Robbins joined Leawood, Kans.-based Creative Planning last year as chief of investor psychology and defender of the fiduciary standard, as reported. Boneparth, who writes that he shares Robbins’ commitment to conflict-free advice, nonetheless takes issue with an article Robbins published on MarketWatch earlier this month dubbed “7 questions you must ask to keep a financial adviser honest.”
Robbins’ assertion that advisors registered with broker-dealers aren’t fiduciaries is incorrect, says Boneparth, who writes that he’s registered with one and can sell commission-based investments but chooses not to. The issue is much more nuanced and Robbins is painting with too broad a brush, according to Boneparth, president of wealth management firm Bone Fide Wealth.
Boneparth faults Robbins with failing to suggest that investors research other background information on potential advisors, including their education, compliance history, work experience, credentials and compatibility.
Boneparth commends Robbins for telling investors to ask whether their advisors’ firms sell proprietary mutual funds, whether the advisors receive third-party commissions for recommendations, and about the advisor’s investment philosophy.
But while this line of questioning can suss out objective advisors, Robbins misses the point, reckons Bonepath. Investments should be a lower priority in picking an advisor, below overall financial planning competence and the ability to provide conflict-free advice. And as long as the conversation about financial advice revolves around investments rather than sound financial education, improvements to the industry — such as the shift away from trading commissions and cold-calling — will be delayed, Boneparth writes.