How do I get my dad to stop taking questionable financial advice from his friends?

1 answer | Last updated: Aug 11, 2014
A fellow caregiver asked...

My dad is constantly touting investment tips and financial advice he receives from his golf buddies and neighbors. The problem is, none of these tips ever pans out, and he has even made a series of foolish financial and investment decisions after listening to these so-called friends. How do I convince him to ignore his friends and stick to the professionals when it comes to money matters?

Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

The important thing to remember is that, with all investment advice, you must consider the source. Keep in mind that even professional money managers rarely beat the market, so imagine how much more difficult it is for an amateur to do so -- especially with an unproven "hot tip."

Of course, even a broken clock is right twice a day, and every now and then one of these investments may prove to be worthwhile -- but usually they aren't worth considering. Remind your dad that his golfing buddies and neighbors probably aren't telling him about all the investments they've chased that turned out to be busts or, even worse, outright scams.

Try to explain to your father that investing in general should be done as a part of a thoughtful plan of asset allocation -- this is the only way to consistently make money. Chasing after hot tips never works, because so-called hot stocks inevitably cool down by the time amateur investors learn about them. It may be less exciting than a get-rich-quick scheme, but most investors are better off by far with a low-cost, low-fee index mutual fund with a proven track record of success.

If he won't listen to your arguments, you might consider taking him to meet with an accountant, broker, or financial planner to talk about better investment options. Sometimes parents are more amenable to what a professional has to say -- even if it's the exact same advice you've been giving.

But if he won't listen to reason or visit a financial advisor, there's unfortunately not much you can do about his money choices -- barring extreme and divisive legal measures, like appointing a court conservator. As long as he's mentally competent, you don't have any legal rights or say as to what he should do with his money.