Most readers of this post have heard of Dave Ramsey, an author and syndicated radio personality heard on over 500 radio stations nationwide. Ramsey, who declared personal bankruptcy in 1988, became a media personality on Nashville radio in the early 1990’s espousing a debt-free lifestyle.
Several years ago, Ramsey started a service called SmartVestor, which connects consumers looking for a financial advisor with “SmartVestor Pros” (financial advisors) that have been given the Ramsey seal of approval. In this post we’ll take a closer look at this program and determine what benefits, if any, it offers consumers.
For starters, consumers should understand that financial advisors pay a fee to Ramsey to be in the SmartVestor Pro network. Those fees can vary but according to various disclosure statements run from $7,500 – $11,000 per year. These fees are paid from the advisor to Ramsey irrespective of whether any prospect becomes a client.
So what criteria is required to be a SmartVestor Pro advisor? According to Ramsey’s website “…these money pros are different. These aren’t just suits with a few letters after their names.” [Editorial comment: That almost makes it seem like having a professional designation is a bad thing!]
According to the Ramsey Solutions, SmartVestor Pros must have “passed a multi-layered vetting, at least two years of experience and a rock-star track record.” What does Ramsey’s “multi-layered vetting” entail & what might a “rock-star track record” look like?
“The Pros sign a Code of Conduct under which they agree to certain general investment principles, such as eliminating debt and investing for the longer-term…”
There’s more, but the rest is little more than an adherence to the financial beliefs of Dave Ramsey and the licensing requirements of FINRA. My gosh, that seems, well, not very robust or layered to me. Mr. Ramsey, let me offer some “multi-layered vetting” questions that might benefit consumers looking for financial advisors.
Are SmartVestor Pros required to have any professional credentials or designations such as CFP® or CFA®? No.
Are SmartVestor Pros required to serve clients as a fiduciary at all times? No.
Are SmartVestor Pros required to do any financial planning? No.
Are SmartVestor Pros required to serve in a fee-only capacity? No.
Dave Ramsey is a money-making marketing machine, but those looking to Ramsey for help in finding a top-quality financial advisor would be wise to look elsewhere.