Second in a series. Having concluded its first season and been renewed for a second, the hit HBO show Ballers on life after football paints a picture of financial planners and their clients living high on the hog. This post, we offer up some Ballers-inspired cautionary notes on what to look for in a professional financial planner and what scenes should send you running for the hills.
Full disclosure: In all my years as a CERTIFIED FINANCIAL PLANNER, I have never snorted rails of cocaine off a hooker's bosom. Nor have I ever witnessed any of my colleagues doing so either. Yet, if you take the HBO show 'Ballers' at face value, you might think that's all we get up to when we're not working our spreadsheets. Perhaps such hijinks happen in a financial advisors office or two somewhere out there but certainly not in ours. Yet, despite the program's OTT misrepresentation financial planners as party boys (and girls), I still maintain that the show gets many of the follies and foibles about money absolutely correct.
So what can 'Ballers' teach us mere mortals about choosing a financial planner?
The Big Four
The four questions anyone should ask before hiring a financial planner are:
1)Do you trust them?
2)Can they help you reach your financial goals?
3)Do they have your best interests at heart?
4)Are they a Certified Financial Planner™?
A response of NO to any of these questions should be a deal breaker. For sure, there are many more questions to ask a financial advisor before actually hiring them--things like fee structure, experience and investment philosophy-- but these initial four are easy to answer and are non-negotiable in my book. So bearing this in mind, let's see how the Ballers guys do.
Trust
Joe Krudel (played by Rod Corddry) really epitomizes the sleazy car salesman image of an 80's era boiler room stockbroker who makes outlandish promises that seem too good to be true (and we all know how those usually pan out, right?) Joe may be a nice-ish guy and a lot of fun, but do you really want to trust him with your life savings? If I reminded you that it was your money he was spending while he's partying hard, would you find his shenanigans quite so amusing? Sadly, I've met many a stockbroker who could be twins with this crazy guy whose better judgement gets blinded by the shiny light of fame and glamour.
Most financial firms or advisors wouldn't (couldn't and shouldn't) go the lengths that the Spencer Strasmore (Dwayne Johnson) does. For example we can't legally lend our clients money or borrow from them either. And while it may sound nice that Spence is paying off Vernon's (Donovan Carter) blackmailer, to be able to afford that $150,000 tab he is either dumb with money, or ripping his client off somewhere else.
Takeaway: Do not expect your financial professional to bail you out of jail or pay off someone who is blackmailing you. (Why do these things always happen outside of market hours, BTW?) Furthermore, a trustworthy financial advisor is neither a dream merchant making promises the market can't possibly keep nor your partner in crime; he or she is your partner in helping you handle your money . . . legally.
Goals
The players of Ballers are far more interested in field goals than long term financial goals, no surprise since they're gifted young athletes at the height of their physical powers. If anything, their biggest goal seems to be getting through practice and back to the party. Living for the moment, and blowing every penny they make (and then some) may seem glamorous and fabulous in the moment, but a big headache after they come down from the fame high and the free flowing fortune that comes with it as Charles (Omar Benson Miller) selling cars can well attest.
Takeaway: Nothing lasts forever and the future will be here before you know it. Leverage Father Time, and his best friend Compounding Interest, and set financial goals for yourself while most importantly developing an active game plan to actually reach them.
Best interests
The star defensive end Vernon has got himself into a real financial pickle by allowing his boyhood friend Reggie (London Brown) to 'manage' his money. While Reggie means well and thinks he has the athlete's best interests at heart, he doesn't really. In fact, being unlicensed, untrained, and unequipped to control Vernon's increasingly rapacious entourage of freeloaders, Reggie is bringing financial disaster down on the head of his buddy.
Takeaway: Look for an Advisor who will tell you what don't want to hear. Your financial advisor is not there to be your best friend and the good ones won't back off from telling you painful truths--in ways a friend never could--if it'll help you financially in the long run.
Certification
I will give it to Spencer Strasmore who does go the extra mile for his clients which is nice. More importantly, he works hard to serve them, even when they have little interest in listening to his advice. That being said, he is just there to monetize his football connections. But the biggest red flag, and this is huge, is that he isn't securities licensed.
The CERTIFIED FINANCIAL PLANNER™ designation means an individual has a CFP® Board-approved education, has successfully passed a rigorous CFP examination, has at least three years of financial planning experience and voluntarily ascribes to the CFP® Board's code of ethics.
Takeaway: Who would you rather have handling your money, a licensed professional who is all of the above or someone whose claim to fame is knocking out his opponent unconscious while playing defense? Repeat after me, no license, no bueno, no deal-e-o.
Previously
Check out the first piece in the Series: Fiscal Ballers 1: Playing Defense on Finance for Those Cursed with Too Much, Too Soon
Next up
We offer up our next Ballers-inspired post on the specific money mistakes each player-RIP Rod, Ricky, Charles and Vernon-has made. Then check out how I, as their financial planner, would get each one on the road to fiscal security were they to sign on as my clients.
DAVID RAE, CFP®, AIF® is a Los Angeles-based Financial Planner with Trilogy Financial Services with extensive experience in retirement planning. A regular contributor to Advocate.com and other news outlets focusing on financial issues in the LGBT community, he posts regularly on Huffington Post as well. Follow him on Twitter @davidraecfp Facebook.com/davidraecfp . For more information about his experience and service visit his website, www.davidraefp.com.
Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA, SIPC, a Registered Investment Advisor. Trilogy and NPC are separate and unrelated entities. The opinions voices in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC.