Usually we hear about beefs in the entertainment industry, but what happens when financial gurus go at one another?
Suze Orman has long reigned as a financial pro offering up advice in books, on television and in magazines. But a fellow financial advisor now says he has an issue with Orman — six issues to be exact.
Johnson said in a July 21 post on his website, that he has had concerns about Orman for years, but only felt the need to speak out recently after Orman offered advice to CNBC.com readers in late June suggesting they not waste money on things that make life easier — like eating out all the time or leasing cars.
Though Johnson notes that this is advice that he and most other financial experts agree on, what really got him going was when Orman shared the story of how she once leased a BMW 750iL to impress the person she was dating…at a time when she didn’t have $800 to spend on a car payment.
“There are people who will foolishly trap themselves into inescapable, multi-year contracts they can’t afford to impress themselves or others. Maybe you’ve met one. But someone who calls themselves personal finance “expert”?” said Johnson.
Johnson goes on to note other moments when he felt Orman’s advice or judgment was less than sound like when she lost $50K in loans that were intended to help the former waitress open her own restaurant. Orman took the money from clients and invested in speculative trading at Merrill Lynch where she lost all of the money. She later joined Merrill Lynch herself and made the money back to pay her investors, she said.
He questioned when she changed her opinion on stocks which shifted from her 2007 advice to not buy them to her 2008 advice to buy exchange-traded sector funds. Johnson said he believes sector funds are too risky and even analyzed how anyone taking Orman’s advice would have been left with a financial loss in 2016.
Johnson also wondered why Orman would advise everyone to get a prenup, which he believes could be too cost prohibitive to be worth it for the average couple.
He goes on to highlight the moment in 2012 when Orman attacked a fan for tweeting a story about Orman’s fledgling pre-paid credit card. Orman later apologized for the lapse in social media etiquette.
Johnson said that Orman and other financial pros regularly tell consumers not to buy new cars, but he then points out that Orman made the decisions to appear in Acura commercials. Johnson said she is trading her credibility for cash.
Though he said that he does agree with the vast majority of things Orman has said over the years, he sums up his feelings as follows:
“It’s reasonable to assume that when you see someone on TV, or see their books on best-seller lists, you can trust their advice. Reasonable, but wrong. Being famous doesn’t make you smart. Oprah Winfrey claiming you’re an expert doesn’t make you one. Being rich doesn’t equate to being wise. Admitting to stupid mistakes doesn’t make them less stupid,” said Johnson.
To be fair, Orman isn’t the only wealthy financial adviser who doesn’t necessarily have to follow the advice he or she gives to the masses.
So is Johnson just giving Orman a hard time or does he make valid points?