It just so happens that the month that begins with the day dedicated to fools is the same month that raises awareness about the importance of financial education.
April is National Financial Skills Month (formerly Financial Literacy Month) and emphasizes “the value of quality financial education in improving the financial skills of Americans.”
When I read about the double fraud charges against the now-shutdown student loan assistance company formerly known as Frank by the Securities and Exchange Commission (SEC) and the U.S. Attorney’s Office for the Southern District of New York, I realized this lofty goal. I thought about
The subject of the complaint is 31-year-old Charlie Javice, who, according to the SEC, “was involved in an old-school scam: She fabricated data and lied about Frank’s success in navigating the college financial aid process.” Her claim.” Javice, who was named to Forbes’ 30 Under 30 list in 2019, denies the claim.
Interestingly, Javice’s cheating was not carried out to defraud users of her service. Rather, she accuses her of falsifying the number of users on her service in order to induce JP Morgan Chase (JPM) to buy her company for her $175 million in 2021. It has been. The third-party data her scientists helped her inflate to show 4.25 million users, versus less than 300,000 users in real life.
If a large investment bank like JPM can be fooled, feel sorry for the rest of us. How do we parse real transactions from scammers and well-meaning but unqualified people who move to TikTok, YouTube, Reddit, etc.?
These platforms amplify questionable financial advice and get-rich-quick videos, making it difficult for some users to parse real financial education from selfish claptraps. Many people pitching ideas may have agendas that are far from what is best for your financial life.
In honor of National Financial Capability Month, I encourage people to seek education, but the description of the official declaration of Financial Capability Month quoted at the beginning of this article was “quality” financial education. Please be careful.
For that, we recommend turning to reliable and trustworthy sources. An easy place to start is to check the person’s background to see if the source of the information has significant professional certifications, licenses or designations. CFP® certification by the Certified Financial Planner Board of Standards (a title I hold), CPA Personal Financial Specialists, Member of the National Association of Personal Financial Advisors, and Chartered Financial Analyst.
All of these designations require the owner to act as trustee and communicate with the public. Fiduciary duty requires that those who provide advice or guidance act in your best interest, even if it is not in the company’s best interest.
You might be surprised to learn that about half of so-called financial professionals don’t have to put your best interests first. They are held to a lower standard called “fitness”. In other words, everything they sell should be right for you.
Even if your mentor or “educator” has no experience or qualifications, you can still enjoy the content, but please do so with a critical eye.
As I warned in my book The Great Money Reset, these platforms can be fun and interesting, but “just know you’re in an investment mosh pit… you’ll come across them with a sharp, skeptical eye.” Be pitted with what you hear and try not to get too emotional.”
CFP’s Jill Schlesinger is a business analyst for CBS News. She is a former options her trader and her CIO at investment advisory firm, and she is available for comments and questions at firstname.lastname@example.org. Check out her website at www.jillonmoney.com.