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When to Offer Financial Advice/Opinions

One pitfall of being savvy about personal finance is getting requests from friends and readers to advise them on their financial situation. On a blog, it’s easy enough to say whatever we want and cover it with a disclaimer that we’re not professionals and this shouldn’t be construed as professional advice, etc.

Yet if we’re approached by a good friend or relative and if it seems we could help them, then it’s hard to say no.

For instance, several of my aunts read my blog. One approached me about her retirement plan. She asked me to look at a fund of funds she was considering. It was Canadian, but similar to those US target retirement funds which are a mixture of stock and bond funds.

Because it’s her retirement, I worried about saying the wrong thing and having her end up with something which turned out to be a bust. At the same time, I’ve been reading up so that I can make these informed decisions for myself—so why not give my aunt my opinion.

As it was, the fund was pretty good. It followed good indexes and the management fee wasn’t outrageous. The allocation percentages looked right for this time in her life and she could switch to a more conservative version in maybe 10 years. It was also with a very reputable company.

I told her that things looked right to me and that this was the type of retirement fund that I’d be looking for.

Whether you write a personal finance blog or you read them (and if you’re here, you probably do the latter at least), there may come times when you are asked to give your opinion or advice. How far are you willing to go? Do you feel up to evaluating retirement plans? Maybe you’re more comfortable explaining principles like the debt snowball/snowflake or why paying off credit card debt promptly is probably a better move than investing instead.

P.S. To my aunt, don’t worry you didn’t stress me out or anything. I hope that my take was useful and that you’ll have a happy retirement someday.

P.P.S. Sorry, dear readers, on the whole I don’t evaluate investments. But Pinyo of Moolanomy and DR of The Dough Roller might be willing to give you their take.

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ChristianPF February 22, 2008 at 1:17 pm

Hmmm… you are right – I get asked questions like this a lot… I always try to offer whatever advice I have. I make it clear when I do NOT know about something, but if I do know a little bit about it, I am not hesitant to share it. Having worked at a brokerage firm for 5 years in many different departments I have learned quite a bit – I guess that helps…

SavingDiva February 22, 2008 at 1:27 pm

No one knows that I have a PF blog…so no one really asks me about investing…thank goodness! I’m the last person someone should ask!

Single Ma February 22, 2008 at 1:37 pm

I get questions from family/friends/blog readers all the time. Depending on what is being asked, I offer practical advice that could be found in a book or on the internet, but I’d never evaluate a retirement portfolio. I’m not competent enough to give a valuable opinion and there’s too much at stake.

Pinyo February 22, 2008 at 2:17 pm

Thank you for the referral. My friends and family occasionally ask me to help. I don’t give individual stocks advice, but I am comfortable talking about mutual funds versus ETF, taxable versus non-taxable, 401k vs IRA, why low expense is good, etc.

Julie February 22, 2008 at 2:56 pm

My friends don’t ask me questions about finance because of my blog, they just know that I know a lot about finance and economics because it’s what I’m interested in. I definitely like to give my opinion, but I would never force someone to take my advice. I think that if they ask for my advice, it’s up to them to decide how much they want to trust me.

Becky@FamilyandFinances February 22, 2008 at 3:16 pm

I work in personal finance for a living, so I have no problems looking at my friends’ and families’ portfolios. I would definitely NOT give a stranger (through blogging) specific advice like that, though. Too much risk!

CT Mom February 22, 2008 at 3:23 pm

I know what you mean. I feel comfortable talking about budgeting, savings, good consumer habits, but not about mutual funds and investments as I’m just learning myself. I’ve offered my help to my SIL who is starting over again after a bad marriage, but only on the subjects above. She’s not ready to go down the investment route yet; when she is, I’ll defer to the experts.

RC@ThinkYourWaytoWealth February 22, 2008 at 9:14 pm

Thought provoking post. Some of my friends know I am into personal finance and investing, but when they ask me questions sometimes I find myself “holding back” for fear of getting them into something they might not really be comfortable with, or more commonly, that they might not be paying enough attention to what I am explaining.(And I am not talking about very sophisticated things either). Some people do not even know which funds they have their 401k money in. So I usually let the conversation take its natural course, but I normally do not talk @ individual stocks.

RacerX February 22, 2008 at 9:34 pm

The best advice that I give is to get a lot of opinions and then form your own. It is YOUR retirement, you must be an active driver and not a passive paasenger!

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