Have you heard the term “armchair quarterback” before? If not, you probably already know what it is in some form. It's a term that's used for an observer who sees how you could benefit from something, recommends doing something about it without knowing the potential risks, and then sits back to watch you do it, not knowing what they've done. That's pretty general, but we'll narrow it down in a minute. The important thing to know is that they exist in all categories, including finances.
The Armchair Financial "Professional"
The armchair financial "professional" could be anyone in your life that works in the field of finance, in some form. (They may not even work in finance but spend time on the internet and consider stocks and finance a hobby.) If they're tuned into the stock market and all of the most recent financial news, they may be more versed in the world of finance, more than most people. Therefore, a lot of them will feel that they are qualified to give specific pieces of financial advice, due to online financial resources.
While it's certainly true that they may be well versed, or even educated in finance, these people are still not certified financial professionals or planners. As such, any advice that they may give you could be just what's happening on the surface and not what's going on behind the numbers seen on the internet or world news. All of this may potentially cause more harm, or put you at risk for loss in your retirement planning. This person is said to be sitting in their metaphorical armchair and recommending (quarterbacking) things to you without the whole picture in mind and well frankly, no risk to them whatsoever.
Why they're dangerous
These kinds of people are dangerous because if you know them socially, you'll be more inclined to take their advice than a professional that you don't know. You'll perceive it (or they'll make it sound) like they know more than some financial professional in an office and it'll be easy to convince you to make a bad decision in trusting this person, even if this person doesn't realize it's a bad decision at the time.
We all want to be helpful to those around us, and if we feel that we have a way to help those around us with financial advice, then we will. The thing is, it's not always the right choice because we are only seeing part of the picture. A financial planner in a professional setting will be able to see the hidden risks, the shortcomings of the advice, the situation that you're in, in a honest and complete way, and more that someone on the outside of the situation – in an armchair, if you will – will not see.
The thing to remember here is this doesn't mean that they're bad people. They could have the best intentions and still cause harm. This is why you need to be very selective and careful in whose advice you take when planning financial freedom. It's complicated enough and a financial planner will be the only one who can properly help you achieve your financial goals in life. They are trained and educated, tested and certified, to look at the whole situation and give proper advice to help you get to where you want to go.
Should you be ready to step away from the online resources, those friends who love to work in finance but don't have the degree and risk to back the advice, contact GPS Wealth Management and get started on success to your financial goals and freedom.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. GPS Wealth Management and Securities America are separate companies. Securities America and its representatives do not provide tax or legal advice; therefore it is important to coordinate with your tax or legal advisor regarding your specific situation. The opinions and forecasts expressed are those of the author, and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.