Are financial planners manipulative?
Wednesday, March 07, 2007
One of my readers commented recently that the financial planner that made me cry might have been psychologically manipulative, trying to make me upset so I’d be more prone to buying his products. I think there’s a point there, but after reading some more on personal finances, I also think, if done right, the soul-searching that some financial planners make you do can actually be beneficial.
Yesterday I started reading Smart Couples Finish Rich by David Bach. He is best known for his best seller, Automatic Millionaire, published in 2003. He appears to have an empire of endless permutations of the same principles packaged for different audiences (women, couples, late starters, prospective homebuyers). Sprinkled throughout the books are little worksheets and diagrams marked with a “TM” symbol (my first clue that this is truly a commercialized author).
Despite the slick and polished exterior, David Bach’s advice has proven to be effective because of its layspeak and simplicity, at least through reader testimonies and reviews. So far in my limited foray into Financial Planning Land he is one of my favorite authors, but I know like with everything else I read, I should take what he says with a grain of salt.
That being said, Smart Couples Finish Rich made me cry. Again. The second chapter is all about defining your purpose as a couple because money in itself is meaningless; rather, it’s the personal values that money allows you to fulfill that matter. The hierarchy is “be,” “do,” and “have,” which corresponds to values, goals, and material possessions. Bach says people reverse the order and end up unhappy because they are not living their values, which causes stress and ultimately the destruction of marriages, families, and everything good in life. Before going on to the practical steps outlined in the rest of the book, Bach makes you define your top 5 values and write them on his (you guessed it) patented “Values Circle.”
Sounds gimmicky, right? But I think he has a point with figuring out what matters most to you. He gives an example of a couple who articulated their values. At first they said things like “I want to have enough put away so if anything happens to me, my family is protected,” “I want to lose 20 pounds” or “I want to travel and play more golf,” but, those being goals, he figured out the underlying values, among them security, marriage, health, freedom, fun, friends, and parents. He offers a long list with even more possibilities: spirituality, fulfillment, power, career, etc.
Once you figure out your values, all subsequent decisions flow from and answer to the values. Tying this back to the First Command planner in Oceanside, I think that’s what he was trying to do with the staircase and asking me “what’s important about [each response I gave]?” He wanted to identify my core values. He didn’t simplify them to the point of a single word, though.
I think mine are spirituality, relationships, health, freedom, and career/fulfillment. Maybe I’m being manipulated, or maybe I’m being taught something useful – or maybe it’s a fine line between manipulation and instruction.
Hey Chanlee, I was reading your update during lunch and wanted to remind you that you and Dave are still young. True, there may be better ways of handling your finances (there always will be better ways, depending on who you ask), but you guys are definitely not at a point in which hope is lost.
There IS a fine line between good instruction/guidance and manipulation… as always, take everything with a grain of salt. Don’t let anyone’s scare tactics push you toward financial planning tools/vehicles that you don’t need. At the end of the day, I think financial planning is more of a discipline than anything else. Don’t mean to undermine the importance of it, just want to make sure you know to look at it with the right perspective. And may I add, I am thoroughly impressed by the amount of foresight, research, and soul-searching you are putting into this!
Thanks for the encouragement! You’re right, it is a discipline, and like any other discipline, you get out of it what you put in. I thought more about my bitterness that I didn’t start earlier and no longer feel bitter – I didn’t know any better, and God is in control. Dave and I may not own a house or impressive stock portfolio, but we don’t lack any physical comforts or modern conveniences either. We just need to be patient with ourselves during this process.
I had a great one in New York. I’d recommend him to anyone. I just made the comment it seemed that the person you saw was manipulative because I thought crying was a bit of an overreaction, so he must have made you feel horrible deliberately.
Nah…I think I’m just oversensitive. Finances are rarely discussed in my family and there was a lot of pent up anxiety and frustration that manifested during the session. I normally avoid thinking about financial planning because I don’t understand it, but I’ve realized that there’s no putting it off any longer… it’s hazardous!
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