The Financial Advisor Who Told Me No

Brent Pittman —  02/01/2016

Have you ever had a financial advisor who told you to NOT invest?

I did and I’m thankful for that guy who saw me as a person who needed wisdom and not as another monthly commission check.

Thank You Street ArrowAn Honest Financial Advisor?

I was in grad school full time, working part time, and seriously dating my future wife.

Back then I was just learning about money and listening to Dave Ramsey while exercising or commuting.

I must have missed the whole baby step thing, because I had it in my mind that I needed to start investing. You see I found my old retirement account from my day of being a teacher and thought I needed to do some investing with it.

One day I wandered into an Edward Jones office in one of the richest areas of San Francisco with the paperwork and intent of becoming a serious investor. The main advisor happened to be in and agreed to meet with me there on the spot. He proceeded to give me an hour long investing lesson using a white board, explaining load and no load funds, compound interest and more.

He talked to me like a person without condensation or judgement. This is an essential quality in choosing a financial advisor. 

At the end of his lesson his advice was for me to NOT invest my retirement in other funds, but to use a small amount to pay off my grad school loan and be debt free with a new degree and a bit of retirement saved.

I was astonished. Did he actually turn down my business? Did he tell me to not invest and do what I came in here to do?

He showed me the door and I was left to my own thoughts.

Not Investing Was a Great Decision

In retrospect, not moving my retirement around was a great decision that day. I had no idea what I was doing. Nor did my life situation warrant beginning to invest at the time.

I did end up cashing it out later to pay off my small graduate school bill, help pay for our wedding, and started our new married life with a little emergency fund.

I am thankful for the honesty and integrity of that financial advisor who told me “No”.

He chose to forego a quick commission check (though I’m sure small to what he was used to) in exchange for helping a misguided graduate student stay out of the market right before the great recession and market crash.

Had I invested, the money would have been reduced to 1/2 its value at the time I needed it most.

Thank you to honest financial advisors who understand their fiduciary responsibility and have their client’s best interest at heart.

How has your experience been with financial advisors?

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Brent Pittman

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Brent is a financial coach and writer looking for the perfect donut. He believes personal finance should be both fun and accessible to anyone willing to learn.
  • Tie the Money Knot

    That’s great, and reassuring to hear that someone actually offered advice that might have taken money out of his own pocket. Good stuff, and glad it worked out for you!

    • Contrary to most of my other experiences with advisors.

  • Jules@Faithful With a Few

    You had a great advisor. I haven’t had one, so I cant really speak from my own experiences. Glad it worked out for u!

  • I don’t have a financial advisor, but I think you had a good experience. This is the type of advisor that I would want to have in my corner, but I hear those are few and far between.

  • krantcents

    I like it when you get good advice! I might disagree about using the retirement money to pay off debt though. Did you have to pay a penalty? Generally speaking, the investment return will exceed the interest rate on the loans.

    • Krant, generally neither do I. This is just what I did years ago before I knew a lot about money. For me though it was a good decision and necessity since I had to cash flow my grad school payments.

  • John S @ Frugal Rules

    That sounds like a great experience. I am surprised that someone from EJ took the time to communicate those things with you, but it just goes to show you that there are some good ones out there and you benefitted from that. I do not deal with an advisor as I manage our investments, but am always glad to hear stories like yours.

    • We are moving towards do 100% advising for ourselves too. One I have a certain amount, I plan on paying a fee only advisor for a review every few years though.

  • I’m curious what taxes and/or penalties you paid by cashing out your retirement funds. I’d be surprised if there weren’t any and those are often enough of a reason to leave those funds be unless you have a real emergency with no other source of money.

    I am surprised that an Edward Jones advisor took the time to explain load vs. no-load funds without you asking, unless his argument that load funds are better, which is bogus but is likely how he makes real money.

    • Oh Matt, you had to find my pain spot in all this. Yes, I did pay penalties almost 30%. This was another learning lesson years ago and yes, I was in grad school scraping by so there weren’t other sources of income besides my part time job.