9781118700730_cover.inddAll of us could use some advice on how to manage our finances. But Steven D. Lockshin says we ought to heed a billboard-sized warning: Be careful out there.

“[T]he financial advice industry,” he says in his important new book Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off, “has more built-in conflicts of interest than almost any other industry.”

Lockshin knows whereof he speaks. He’s consistently been one of the top-rated financial advisors in the country by Barron’s and for 20 years he ran his own fee-only, conflict-avoiding advisory firm.  Now he’s helping the rest of us figure out whom we can trust for honest guidance about money matters.

Because the book was so revealing, I asked Lockshin to answer some questions about his book for readers. He’s also provided an outstanding 8-page PDF on the questions you should ask anyone aiming to give you financial advice.


At the heart of the book is the distinction between advisors who must meet a “suitability standard” and those who must meet a “fiduciary standard.” It sounds a bit wonky, but it’s a big deal. Explain.

Advisors who must meet a “suitability standard” are required only to offer advice that’s suitable for their clients, which means they can suggest products that earn them big commissions but that aren’t necessarily the best choice for the client. Financial advisors who must meet a “fiduciary standard” are legally obligated to put their clients’ interests first.

Think of it this way. Some advisors say, “If there are two products and they’re both decent, I’ll always select the one that pays me more.” But others say, “If there are two products to choose from and they’re both similar and appropriate, I’ll always select the one that costs the client less.”


Ok. So how do I determine which is which?

In its simplest form, a fiduciary – a true steward of your financial well being – will always place your interests first.  Full stop.  Any conflict of interest should be a yellow (if not a red) flag that your advisor may be tempted to put their interests before yours.


What else should we be looking for in an advisor?

Make sure your advisor has the skills and qualifications to meet your needs. Check his or her violations history through FINRA’s or the SEC’s website and ask lots of questions to understand the advisor’s level of education and experience in the financial services industry. You’ll be surprised to know that there are almost zero education requirements to become a financial advisor.


Do all of us really need an advisor? Can’t we do a lot of this work online on our own?

It’s possible to handle your investments and savings on your own, provided you possess one important skill – discipline. There are also online solutions like Betterment.com or Wealthfront.com and others that automate investing and savings for you at a fraction of the cost of retail advisors – and do it quite well! However, here’s the key: The math is simple, but the emotion and discipline are not.  Much like dieting, most of us know what to eat and how to exercise; yet we often need a trainer or dietician to assist with our discipline.  A good financial advisor can help with that discipline.


What’s one thing Pink Newsletter readers could do today to improve their chances of successfully navigating their financial futures? 

Probably the most important thing is making an honest assessment of one’s current situation.  Ask a few really simple, but extremely important, questions. For example:

1)   Am I disciplined about my financial planning process or do I rely on someone else to do my thinking for me?

2)   Do I truly understand what I am paying in fees?

3)   If I do rely on someone else, am I confident that person is dedicated to meeting my needs without any economic conflicts of interest that could get in the way?

4)   Have I religiously searched for the best advisor to meet my needs by asking tough questions rather than making an emotional decision?

For more, check out the book Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off and this free PDF on the questions you should ask any prospective advisor.

One Response to “Interview with Steven D. Lockshin, author of Get Wise to Your Advisor”

  1. larry elford says:

    Thanks Steven for a great book for the public to protect their financial health. As a recovering broker I agree with the quotes about finding a broker with a fiduciary duty to serve the client interest first. The industry pulls the world’s greatest “bait and switch” with this misrepresentation and I made a video to help people get their money back. No investment dealer should be able to fraudulently misrepresent their customers without having to refund them their investments. Free video, no obligation, no commercials…. http://www.youtube.com/watch?v=KH6XMXlfdBw&feature=share&list=UUy8dpTRZHEz-0JBa_l0w7AQ

Leave a Reply