Monday, January 18, 2010

Freedom of Choice: Big Banks vs. Community Banks and Smart Financial Advice vs. RISKY Advice

Freedom of Choice: Big Banks vs. Community Banks and Smart Financial Advice vs. RISKY Advice

An associate brought this ABC News report to my attention. The gist is that average, everyday folks who feel taken advantage of by some of the "Big Banks" have decided to fight back. The movement is known as "Move Your Money," and their beef is that these banks are nickel-and-diming them unnecessarily, by raising credit card rates without any merit whatsoever and hitting customers with a $30 fee for a $5 overdraft.

On the one hand, it could be argued that we live in the land of freedom where the markets are supposed to dictate pricing. So it’s our responsibility to understand what we sign up for with these banks. And we are all free to leave whenever we feel we can get a better deal elsewhere, or for whatever other reason impels us. I think there's a saying that goes something like, “One man’s meat is another man’s poison.” Isn’t that the whole idea behind the free market system?

On the other hand, though, we can also argue that if any institution in a free market system thinks it is OK to take advantage of unsuspecting clients by trying to outsmart them with hidden garbage, that institution should be heckled as hard as possible and punished by the consuming public who takes their business elsewhere. And if such a trend leads to the demise of the institution, so be it. That is also how the free market system is supposed to work.

I am pretty sure my economics professors would be incredibly proud of me right now. Seems like I did pay attention, after all! Well, whichever school of thought you subscribe to, you’re welcome here!

A Question More Worthy of Exploration

How come no one is standing up to question the conventional financial planning industry when they encourage Americans to simply dump their funds into variable investments and wait for the day when they will retire in peace with milk and honey? When in fact every time the stock market experiences a correction, tens of millions of retirees, as well as those on the brink of retirement and those just starting out and those in midstream, experience complete devastation as their life savings are diminished – in some cases to as little as 50 percent of its original value?

Is this inevitable? Of course not! Those working with financial professionals who apply common sense and reality to their investments do not lose when market dips. It seems, for now, as though the storm has subsided, but who knows when it will rear its ugly head again? Could it be just as YOU are preparing to retire?

In this free market system, some choose to pursue investment strategies that protect them against any losses when the stock market tanks; there are also those who continue to follow a strategy whereby their future retirements are completely at the mercy of the unpredictable stock market. Which movement do you belong to?

PS: You’ve seen the images and heard the horror stories. Please reach out to assist those in need in Haiti in any manner you can. While you should be extremely mindful of scammers who prey on international incidents like this to take advantage of your generosity, there are excellent organizations that work hard to ensure that your contributions actually reach those in need. If you need help finding such an organization, please let me know in the Comments Section below and I’ll get you some names.

Please note that the simplest act of kindness can go a long way. If someone you know is experiencing emotional pain, simply letting them know that you care and are praying for them might help enormously. At the end of the day, we all belong to one big family – humanity. Thank you.
For your free, no-obligation consultation regarding how you can better plan to withstand the ups and downs of the market, please visit or call us at 301-949-4449.


  1. i guess they always get away with it because of what you said about the free markets. But i hope we had a system that detects these bad apples right away and punishes them. i think you are one of very few advisors who are actually realistic and looking out for the public. the rest say they do but their actions always prove different. very nice and insightful blog. thanks


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