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What You Should Know About Dave Ramsey Endorsed Local Providers

Dave Ramsey has built a reputation as a trusted authority on personal finance, thanks to his nationwide radio show and numerous books. While he is not a licensed financial advisor (though he does hold a real estate license), his advice resonates with millions of Americans seeking to improve their financial well-being. Consequently, many people turn to Ramsey for recommendations on financial service providers, including financial advisors, insurance agents, and realtors. To cater to this demand, Ramsey has developed a network of Endorsed Local Providers (ELPs), which, according to some estimates, generates over $10 million per year for Ramsey.

But what does it really mean to be an ELP and should you consider the ELP as a sign of working with a top professional? 

Should You Work with a SmartVestor Pro?

Financial advisors who want to be part of Ramsey’s SmartVestor Pro network pay a fee to join. These fees can range from $7,500 to $11,000 per year. 

What Criteria Is Required to Be a Dave Ramsey SmartVestor Pro Advisor?

According to Ramsey’s website, SmartVestor Pros are described as "different" from typical financial advisors. Ramsey claims that these advisors have passed "multi-layered vetting," possess at least two years of experience, and have a "rock-star track record." But what does this really entail?

  • Vetting: The "multi-layered vetting" process seems to focus more on adherence to Ramsey’s financial principles, like eliminating debt and investing for the long term, rather than on the advisor’s professional qualifications.
  • Experience: While two years of experience is required, this is a relatively low bar compared to other industry standards.
  • Code of Conduct: SmartVestor Pros sign a Code of Conduct agreeing to general investment principles aligned with Ramsey’s teachings.

But here’s what consumers should ask:

  • Are SmartVestor Pros required to have professional credentials like CFP® or CFA®? No.
  • Are SmartVestor Pros required to act as fiduciaries at all times? No.
  • Are SmartVestor Pros required to provide comprehensive financial planning? No.
  • Are SmartVestor Pros required to operate in a fee-only capacity? No.
  • Are there limits on the number of clients a SmartVestor Pro can serve? No.

How Do Realtors Become RamseyTrusted Realtors? 

Being part of Dave Ramsey’s ELP network implies a personal recommendation from Ramsey himself. Realtors in this network are vetted by his team, but the requirements may not be as rigorous as you’d expect.

Here’s what Dave Ramsey requires of his real estate ELPs:

  • Willingness to work with clients who may have limited financial resources.
  • A commitment to working in the client’s best interest.
  • Proper licensing and good standing in the industry.
  • Experience in representing clients during challenging markets.
  • Adherence to Dave Ramsey’s financial principles.

Realtors must also have at least four years of experience and a minimum of 25 closed transactions in the past 12 months. Realtors must continue to maintain these standards to remain in the program.

What Does it Cost to Be a RamseyTrusted Realtor?

Real estate agents who wish to join the ELP network pay an upfront fee of $3,000, plus a monthly fee ranging from $400 to $900, depending on the market. Additionally, these agents must pay 28% of their commission on any closed transaction to Ramsey. Each referral is sent to multiple providers, all of whom are paying for the same lead.

How are RamseyTrusted Pros (Insurance Providers) Chosen?

Ramsey’s network also includes insurance agents offering a variety of policies, such as life, health, home, car, and long-term care insurance.

The cost to be in this network varies depending on the type of insurance and market, with leads costing between $60 and $100 each, plus a fee to remain in the network. While Ramsey claims that these agents are held to high standards, there is little evidence to suggest that these standards include significant industry experience or professional credentials.

The Upshot: Buyer Beware

The main qualification for becoming an Endorsed Local Provider seems to be the willingness to pay for the privilege of Dave Ramsey’s endorsement. While Ramsey may make it seem like his vetting is rigorous, it appears to be little more than window dressing.

Before choosing an advisor or agent from Ramsey’s network, it’s crucial to do your own due diligence to ensure the professional you are considering meets your personal financial needs.