MW We're awash in 'expert' investment advice. How do you find what's right for you?

By Morey Stettner

Sifting through opinions and claims can leave you with even more questions. Here's how to navigate.

How should you invest right now? Almost everyone has an opinion. Whether you're watching a portfolio manager on TV, reading market commentary from a brokerage firm or talking one-on-one with a financial planner, you're often left wondering, "Whom should I listen to?"

You might assume that heeding the advice of a financial planner with a nice office (or a nice website) makes more sense than listening to a money guru who hosts a radio show or appears on cable news.

But anyone call call themselves a "financial planner," warns Nathan Harness, director of financial planning at Texas A&M University. A license or regulatory approval isn't necessary for someone to simply add "planner" to their job title.

"But you do need to pass an exam to become a certified financial planner," Harness added. Advisers like Harness who hold the CFP designation must also follow a code of ethics and gain enough work experience to qualify.

That doesn't mean you should blindly follow a CFP's recommendations. But it's a credential that differentiates advisers.

If you're seeking more sophisticated investment advice, another credential - chartered financial analyst $(CFA)$ - is worth noting.

Some money gurus, especially media personalities, radiate confidence and speak emphatically. They assert their views forcefully without offering clear, logical support for their conclusion.

As a rule, you'll want to prioritize financial advice that's rooted in verifiable data, not dogmatic claims.

"Listen to advice that's based on data, not mere speculation or mere emotion," said Thomas Korankye, an assistant professor of personal and family financial planning at University of Arizona's Norton School of Human Ecology.

Indeed, beware of money gurus who talk about the future as if they have a crystal ball. Be skeptical of opinions that carry strongly worded warnings ("The U.S. will definitely face a severe recession this year") or overly specific predictions ("Stocks will fall 20% to 30% over the next six months.")

"Nobody can tell the future," said Demissew Diro Ejara, an associate professor of finance at University of New Haven's Pompea College of Business. "It's all a forecast, and there's always a margin for error" no matter how strongly someone voices certitude about what's ahead.

When getting financial advice from any source, ask yourself, "What does this person have to gain by saying this?" Know how the individual is paid or what motivates them to dish out advice.

"If they're promoting something, is there a personal interest?" said Korankye, who holds the CFP designation. "Do they disclose potential conflicts of interest?"

It's one thing to consult with a financial adviser who understands your investment goals, risk tolerance and time horizon. But if you're tempted to accept the recommendations of someone you don't know personally - based on their social media feed or TV or radio appearances - you're on shaky ground.

"Every individual is unique, so anybody [in the media] who's honest should say, 'My advice may not apply to you because I don't know your unique situation,'" Korankye said. "Be careful of general advice. And be careful of people who overemphasize sales" and pressure you to act now or else.

The most credible portfolio advice acknowledges the potential for losses as well as gains. There's a judicious balance between "You may want to consider this" and "Here are the downsides."

"They should tell you about any adverse effects of any investment," Korankye said. "Watch out if they only talk about one side of the coin."

Perhaps the most revealing clue for anyone receiving financial advice is counterintuitive: You're probably better off listening to those who admit what they don't know and who acknowledge their mistakes.

Said Gary Simmerman, an adjunct finance professor at Southern New Hampshire University: "If they're willing to admit a wrong call in the past or say, 'Here's something I don't fully understand,' that's awesome. Humility is very important."

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-Morey Stettner

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April 05, 2025 16:43 ET (20:43 GMT)

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