Posted By: CFP&WM On: May 22nd, 2009 In: Beware - Horror stories General info My soap box

Suze Orman: The Good, the Bad, But the Never Ugly

Okay, so I modified the title of a Clint Eastwood movie, but it sort of fits.

Her books are top sellers, she is often on TV, she markets “kits” to help, and she is seemingly everywhere so we all know that she is an attractive lady (certainly never ugly). 

Everyone knows Suze Orman but many do not know her background. She went from being a waitress in Berkeley (1973), to becoming an account executive (stock broker) at Merrill Lynch. She then moved to Prudential Bache Securities in1983 and in 1987 opened her own company Suze Orman Financial Group. She stepped down in 1997 as head of her firm to work on her books, appearances and other products.

“The Good” about Suze is that she raises the public’s perception as to the importance of making good financial decisions such as, not overspending, proper use of credit, having a good credit score, mitigating risk properly, having your affairs in order, investing for the future and on and on.

“The Bad” about Suzie is that she is still a sales person. Rather than “selling” stocks and bonds (when she was an employee of a broker dealer) it is now books and kits. (Go to take a look there is seemingly something for everyone.) The issue I have is that her “one-size fits all” approach does not fit all and could in fact hurt some folks.

On her website, Suze said “If you are at least 20 years away from retirement, I think having 80% or more of your money in stocks makes sense. If you are within 10 years of retirement, you might want to keep 30% in stocks with the rest in bonds.” I am sorry, but that is just plain WRONG! One’s asset allocation should be based on your risk tolerance, your risk capacity and your goals (which include the time frame). This one size approach will negatively impact many people.

In her “Wills and Trusts Kit” where she says the kit contains “all the estate planning documents you need”. “It’s like having your own financial planner and personal trust attorney at your finger tips” Neither of these statements is true. It’s the kind of language that salespeople use to hype their product and for those that are buying the kit I’m sure it sounds good.

In the kit, she states that the information provided is of general nature and for specific advice see your attorney. Yet the CD allows the buyer to produce legal documents, which to me is very specific.  The instructions also say to take the forms that are produced to your attorney for review. Yeah, like that’s going to happen.

By the way on the “test” forms that were produced for me, the notary block on each document were incorrect for California and it would be illegal for a notary to notarize such a document.

On balance, the good of increasing the public’s awareness to the importance of financial planning over whelms the bad associated with her “one-size fits all” sales approach and she is pleasant to look at.

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