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Barron’s Top Advisors List The Latest To Demonstrate Broadbrush (Negative) Views of Advisors
All financial advisors are the same and none deliver the value they claim to.
It’s a recurring theme in comments on online media content about financial advisors. Today’s post is prompted by the Barron’s Top 1,000 Financial Advisors list, an annual feature that attracted zero comments this time last year but has 17 comments so far this weekend. The tone reminded us of the readers’ comments (52) on a New York Times article in October 2009 about financial planners.
In general, commenters are using the broadest of brushes to negatively characterize financial advisors and the services they provide.
And Barron’s is catching some heat, too, for its advisor metrics. One commenter questions: “Why aren’t the average performance of the advisor’s accounts given? Ninety seven per cent retention rate says more about salesmanship than the advisors’ abilities.” And, a few savvy writers note the reprint revenue to be expected from producing such lists.
We contrast the gist of these comments with the content and tone of the individual financial advisors’ tweets we see in the daily AdvisorTweets stream. Twitter—and other forms of social media—affords advisors visibility with which many are building credible personal brands that help set them apart from what “everybody” considers the “typical” financial advisor.
An investor couldn’t select a financial advisor on the basis of the Barron’s list but just might learn something about an advisor whose tweets he or she follows.
February 22, 2010 - 10:31 am
Consumers need to understand that financial advisors should not be evaluated on portfolio performance. This metric is better suited to compare mutual fund managers, as that is all they do: manage one portfolio.
Advisors, particularly those who are part of the Secret Society of REAL Financial Planners, do so much more than manage money. Consumers need to understand that and acknowledge that rating an advisor touches on many other measures rather than strictly portfolio performance.
Bill @ FPPad.com
[Reply]
Pat Allen Reply:
February 22nd, 2010 at 11:24 am
Bill, thanks for the comment. I think we’re agreeing, although coming from two different points. I get your point that a financial advisor’s value goes beyond the results of an investment portfolio.
I’ve been following with great interest the formation of the Secret Society, whose core purpose is to differentiate. In this post, I wanted to make the point that Barron’s presentation of top advisors has limited usefulness in helping investors select an advisor. I think we’re both saying that there are no columns of numbers that Barron’s could publish that would help differentiate one advisor from another in a meaningful, reliable way.
But in the tweets they send and in their visible interactions with others, the small group of advisors using Twitter today are differentiating themselves. Carl Richards concludes the post you link to by asking for stories as opposed to performance data. We come together in the belief that it is qualitative information (i.e., stories and tweets) that will enable investors to find the “right-fit” advisors.
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